Incident: On the evening of June 25, the company announced that it plans to use its own capital to invest about 300 million yuan in the construction of the China Yixing Environmental Protection Equipment Intelligent Manufacturing Park project to plan 160 acres of land in the Gaoteng Town Industrial Concentration Zone in Yixing City for intelligent production of environmental protection equipment, technology research and development, office, display, trading, ancillary supporting measures, etc. Our comments on this are as follows: Investment points: Invest in the construction of an intelligent manufacturing park and build a high-end environmental protection equipment pilot company plans to invest 300 million yuan in the construction of the China Yixing Environmental Protection Equipment Intelligent Manufacturing Park project. The project covers an area of about 1.6 million acres, including 70,000 square meters of modern plants including a material supermarket, a high-end machining area, and a finished product storage area, and 50,000 square meters of high-quality environmental protection business center complex with equipment display, trading, R&D, and office functions. The project is expected to begin construction in September 2018, and is expected to be officially put into operation in March 2019. . Yixing City is the region with the highest concentration of environmental protection industries in China. It has more than 2,600 environmental protection enterprises, and is known as the “hometown of environmental protection in China”. However, the overall industry is scattered, and the level of specialized cooperation between enterprises is not high, which limits the cluster effect and core competitiveness of Yixing's environmental protection industry. The company is investing in the construction of the China Yixing Environmental Protection Equipment Intelligent Manufacturing Park project. On the one hand, it can integrate resources, raise the level of intelligence and standardization of environmental protection equipment manufacturing in Yixing, and promote the clustering of the environmental protection industry in Yixing. On the other hand, the project is the company's established plan to expand the high-end environmental protection equipment business, which can enable the company to become a leader in the environmental protection equipment manufacturing industry in Yixing and China. Continuously consolidating the sewage treatment business and entering the organic solid waste recycling application field. In 2017, the company won bids for sewage treatment projects such as Qiyang, Yuanjiang, Zhoukou Shanan Phase III, Shaerqin, Changchun Southeast Plant, and Danbei Houxiang. The order amount was 1,088 billion yuan, an increase over the previous year. After listing, the company is expected to use its brand advantages and financing advantages to obtain more orders, and the traditional water business will continue to be consolidated. At the same time, the company is also actively developing emerging businesses such as solid waste and ecology, using the treatment of agricultural organic solid waste such as straw, livestock and poultry manure as the main development direction, and joined forces with Nanjing Agricultural University (technical support) and Lianye Technology (equipment and operation experience) to enter the organic solid waste recycling application field. Currently, it has signed organic fertilizer projects with a total annual output of 500,000 tons in Xinjiang (100,000 tons), Nong'an (300,000 tons), and Bozhou (100,000 tons). Currently, environmental protection inspections are getting stricter, and rural surface source pollution control is just beginning Stage, recycling of organic solid waste Taking advantage of the market's potential, the company lays out ahead of schedule and lays the stage for future growth. Profit forecast and investment rating: Maintain the company's “gain” rating. The company's 2018-2020 EPS is expected to be 0.49, 0.58, and 0.65 yuan respectively, corresponding to the current share price PE of 37, 32, and 28 times, maintaining the company's “gain” rating. Risk warning: the risk of slow progress of the Smart Manufacturing Park project, the risk of project acquisition and progress falling short of expectations, the risk of a sharp increase in accounts receivable, the risk of organic solid waste recycling projects progressing slowly, the risk of organic fertilizer prices and sales falling short of expectations, and the risk of macroeconomic downturn.