The acquisition of CNOOC Wobang has successfully passed the review. To create a dual main business of natural gas and horticultural products, the company plans to issue 404.65 million shares of the company at a price of 25.8 yuan/share and acquire 23.2% of CNOOC's shares at 1,044 million yuan. The plan was approved by the Merger, Acquisition and Reorganization Committee of the Securities Regulatory Commission on December 5, 2018. Currently, the company holds 27.20% of CNOOC Wobang's shares through its 51% subsidiary Wojin Energy. After the acquisition is completed, the company will control 50.5% of CNOOC Wobang's shares, with a shareholding ratio of 37.17%. After the transaction is completed, the company will form a dual main business of natural gas extraction and sales and horticultural products manufacturing. Shareholders of CNOOC Wobang promised to achieve net profit of no less than 362.2 million yuan, 454.5 million yuan, and 555.6 million yuan in 2018, 2019, and 2020, respectively. The filing of the new block is nearing completion, and natural gas production will grow rapidly. CNOOC Wobang is an upstream natural gas mining enterprise. It signed a “Cooperation Contract” with CNPC Coalbed Methane Company in 2009 and obtained natural gas exploration, development, production and operation rights for 1,524 square kilometers in Shilou West Block for 30 years. At present, it has discovered a geological reserve of 127.6 billion square meters. In 2017, as Yonghe Block 18 entered commercial mining, CNOOC's natural gas production reached 623 million square meters, operating income of 770 million yuan, and net profit of 310 million yuan, an increase of 175% over the previous year. Yonghe 45 — The 1.2 billion m3/year natural gas development plan for the Yonghe 18 well area has been registered with the National Energy Administration, and mining licenses for 1.2 billion m3/year of natural gas are being processed in accordance with relevant regulations. In the future, with the continuous development of the Shilou West Block, CNOOC Wobang's natural gas production scale will continue to expand. With high barriers and scarce resources, low market capitalization, low valuations, and high growth, China's natural gas supply and demand will maintain a tight balance between supply and demand in the next few years, and the value of upstream natural gas resources is becoming more and more prominent. Furthermore, in September '18, the State Council issued “Certain Opinions on Promoting Coordinated and Stable Development of Natural Gas”, which proposed that during the “14th Five-Year Plan” period, it is proposed to include dense gas extraction in the category of unconventional natural gas subsidies. If this policy is eventually implemented, companies will benefit greatly. Assuming that this year's cash acquisition portion starts in February, and the rest can be combined throughout 2019, we expect the company to achieve net profit of 120 million/150 million dollars in 2019-2020, with a corresponding valuation of 26 times /21 times, and the corresponding market value of about 3 billion dollars after the company's increase. As new blocks continue to enter commercial mining, the company has broad growth prospects and is given a “highly recommended” rating. Risk warning: risk of unsuccessful restructuring; natural gas block filing or extraction falling short of expectations; fluctuations in natural gas sales prices; fluctuations in capital costs