Incident: The company recently announced its 2017 performance forecast. The net profit for the full year is expected to be 132 million yuan to 145 million yuan, an increase of 184.45%-212.46% over the previous year. The performance is growing rapidly, which is basically in line with our expectations. In 2017, the company's projects such as high temperature and ultra-high pressure intermediate reheated gas power generation, the comprehensive transformation of Gaoyi Iron and Steel Gas Power Generation in Gaoyi, Shanxi, and grassroots new energy biomass cogeneration in Daming County progressed smoothly, significantly increasing the company's performance. At the same time, the company announced that the amount of non-recurring profit and loss in 2017 was approximately 1.777 million yuan. The company's performance has grown rapidly, and the leader in fluid equipment has successfully transitioned into the field of renewable energy power generation. The company has been deeply involved in the fluid equipment industry for many years, focusing on products such as compressors and steam turbines, leading domestic technology. The company is gradually entering the field of renewable energy power generation, and currently has relevant engineering capabilities and EMC operation qualifications such as power island integration and air station integration. The company is expected to fully enjoy the rapid development of the renewable energy industry. Relying on its advantages in the field of fluid equipment, it is expected to form a good synergy with the renewable energy power generation business. The company achieved net profit of 100 million yuan to mother in the first three quarters of 2017, an increase of 100% over the previous year, corresponding to a single quarter profit of 32 million yuan to 45 million yuan in Q4. The fourth quarter has not always been the company's high performance (net profit for Q4 2015 and 2016 Q4 was 2.803 million yuan and -37.93 million yuan, respectively). The sharp increase in performance in the fourth quarter of 2017 was mainly due to the good operation of the company's various power generation projects, further verifying that the company's gradual transformation to renewable energy power generation led to a significant increase in the company's profitability. Furthermore, the company's gross margin level has continued to rise in recent years. The three-rate rate is gradually declining, and the net interest rate level is rising rapidly, and we continue to be optimistic about the company's transformation and future development. The agricultural environmental protection industrial park was vigorously promoted, and the Gaoyou Biogas 100MW power generation project of a company with good energy synergy was acquired in September 2017. The scale was one of the highest in the country, and the demonstration effect was obvious. The company took this opportunity to vigorously promote agricultural environmental protection industrial parks. According to the company's estimates, the average arable land in a county is about 1 million mu, with an average treatment rate of about 50%, compared to the processing demand of about 500,000 tons of straw. Currently, economic benefits are mainly generated through the use of fuel such as straw and biofertilizer. The recovery period for the entire project is about 6 years. The current cooperation model is self-operated demonstration and the search for local cooperative enterprises. In 2017, the company signed a framework agreement of 4.74 billion yuan. After the Gaoyou project forms a demonstration effect, it will effectively drive the implementation of local projects. The company recently announced the acquisition of 100% of Shanghai Yunneng's shares, with a transaction amount of 785 million yuan. After Shanghai Yunneng becomes a wholly-owned subsidiary, the company is expected to use Shanghai Yunneng's rich project experience in the biomass power generation field, customer resources and the technical advantages of environmentally friendly boilers to have a good synergy effect with the existing business to help the company develop its renewable energy business in the future. Profit forecast and investment rating: Without considering the impact of the acquisition of Shanghai Yunneng, the company's net profit for 2017-2019 is estimated to be 1.36, 2.34, and 373 million yuan respectively, corresponding to EPS of 0.24, 0.42, and 0.67, and PE of 64, 37, and 23 times, respectively, maintaining a “buy” rating. Risk warning: Renewable energy generation promotion fell short of expectations, Shanghai Yunneng's acquisition failed.