The chairman's participation in the finalization has increased confidence in development. Future project implementation is expected to accelerate. The company recently released a non-public stock issuance report. A total of 44.76 million shares were issued, capital raised 880 million yuan, net raised 863 million yuan, and the issue price was 19.66 yuan/share. Jianxin Fund, Golden Eagle Fund, Cinda Bank of Australia Fund, and Chairman Cheng Zongyu participated in the subscription. The investment amounts were 1.81, 2.99, 3.00, and 100 million yuan respectively. The chairman's subscription ratio was 11.4%. After the fixed increase was completed, he held 157 million shares of the company. The shareholding ratio fell to 45.53% from 50.63% before the fixed increase, and the company's controlling shareholders and actual controllers did not change. After the fixed increase is completed, the company's capital structure is further optimized. Using the 2017 annual report data as a benchmark, the company's balance ratio will drop from 54.35% to 35.38%. Nearly 550 million yuan of the capital raised will be used for the “supplementary lighting project supporting capital project”, and the rest will be used for the “LED landscape art lighting R&D and production base and experience display center construction project” and the “contract energy management working capital project”. The smooth implementation of the fund-raising projects is expected to greatly increase the speed of implementation of the company's ongoing contracts, and it is anticipated that future performance is still likely to accelerate. Acquire Yongqi Lighting and participate in Guangcai Lighting to further integrate industry resources to strengthen and expand. According to data from the Ministry of Housing and Construction's National Construction Market Supervision Public Service Platform, currently only 49 companies in the country have Class A qualifications for lighting engineering design and construction at the same time. In the face of scarce qualifications, industry leaders are also continuously acquiring and integrating industry resources. Yongqi Lighting has double certification and is headquartered in Ningbo. Its business covers Ningbo, Qingdao, Fenghua, Cixi, Xi'an and other places. The newly signed Qingdao contract alone has already exceeded 100 million yuan, and its reputation among owners is extremely high. The company used 247.5 million dollars in cash to acquire 55% of its shares, which will effectively increase the company's EPS. Yongqi Lighting promises that profits from 2018 to 2020 will not be less than 50, 65, and 85 million yuan, an increase of 15%, 30%, and 31% over the previous year. The registration of industrial and commercial changes was officially completed in mid-April and included in the company's consolidated statement. At the same time, the company invested 11.1 million yuan through equity transfers and capital increases to obtain 30% of Shenzhen's shares in Guangcai Mingzhou. The company also has a double qualification in lighting engineering. Through these two acquisitions and shareholding, the company has further integrated the qualified resources within the industry, and market concentration will increase. Orders are plentiful, and profits will continue to grow rapidly. Over 17 years, the company has successively signed construction contracts and framework agreements for lighting projects with the governments of Hanzhong in Shaanxi, Lu'an, Anhui, and Shanghai. Recently, it also signed a 344 million PPP contract with the Qingdao government, helping with the night view of the SCO summit in Qingdao, and there are plenty of orders in hand. The company achieved profit of 174 million yuan in 2017, an increase of 72.72%. The first quarter report continued to grow at a high rate of 69.68%. At the same time, the company's first quarter report expects net profit from January to June 2018 to increase significantly compared to the same period. Investment advice: The company's capital structure will be improved after this fixed increase is completed. Future project implementation is expected to accelerate, and future performance is still likely to accelerate. Since the additional shares have not yet been listed, we will maintain our current share capital for the time being. We expect the EPS from 2018 to 2020 to be 1.15, 1.83, and 2.74 yuan/share, and the corresponding PE will be 19, 12, and 8 times, maintaining the “buy” rating and target price of 26 yuan. Risk warning: Project repayment falls short of expectations, merger and acquisition integration falls short of expectations