Guide to this report: The company is deeply involved in the main ecological environment business, expands new water/cultural tourism businesses, and continues to optimize its business structure; participation in micro-communication will boost the influencer economy, and Hengrun is expected to be spun off and listed; proposed increases will ease financial pressure, and it is optimistic that performance will solidify and recover. Key investment points: Maintain an increase in holdings. The company's 2019 revenue of 7.96 billion yuan (-10%) and net profit of 330 million yuan (-57.9%) fell short of expectations. The company actively slowed down business and strengthened cash flow management; considering the impact of the epidemic/more serious business development, the company's 2020-21 EPS to 0.23/0.28 yuan (previously 0.34/0.38 yuan) growth rate was 6/ 23%, and the 2022 EPS was predicted to grow at 0.34 yuan, 22%; the company's valuation was comparable to that of the company, which gave 22.5 times PE in 2020, lowered the target price to 5.18 yuan, an increase in holdings. Gross and net interest rates declined, and operating cash flow improved sharply. 1) Main revenue composition in 2019: ecological restoration 40%, water environment 47%, cultural tourism 13%; 2) quarterly net profit growth rate -64/-41/-48/ -89%; 3) gross profit ratio 23.7% (-1.4pct), ecological restoration 22.6% (+1.5pct) /water environment 18.5% (-4.3pct) /cultural tourism 46% (+3.6pct); net profit rate 4.4% (-4.6pct); 4) period expense rate 14.8% (+2.1pct), financial cost rate (3.2%) 0.7 pct ) /R&D expense ratio 3.8% (+1.2pct); 5) Net operating cash flow of 1.27 billion yuan (+997%) due to increased collection efforts, payout ratio is 73.5% (+6.2 pct) /payout ratio is 61% (-0.7pct); 6) Accounts receivable account for 17% of total assets (-1.7pct), and debt ratio is 73.4% (+1.7pct). Driven by ecology and cultural tourism, it is planned to split and go public to raise valuation, and participate in MCN to boost the influencer economy. 1) The business model is shifting to the value matrix of the entire “ecology+cultural tourism” industry chain; creating the three core competencies of front-end comprehensive planning, mid-end content and product implementation, and back-end integrated operation; 2) the urban layout is deeply involved in core urban agglomerations such as the Greater Bay Area/Yangtze River Delta; 3) The ecological business has two major garden/municipal groups, prioritizing the EPC model; the “trinity” of the water business exceeds the performance commitment in 2019 (105%); the cultural tourism business is centered on Hengrun and Demaghi; Hengrun plans to spin-off and promote favorable valuation; 4) Microcommunication, a new third-board MCN company with a stake in the new third board (about 22% (Shares) Benefiting from the influencer economy, it will boost the live e-commerce sector. The proposed increase will facilitate the progress of the project and reduce the debt ratio. 1) It is proposed to raise no more than $1.22 billion in capital from no more than 35 specific investors, which will be used to promote and supplement ongoing projects ($350 million); 2) The fixed increase will facilitate the implementation of ongoing projects/optimize capital structure/reduce financial risks/improve resilience to risks. Risk Alerts: Capital mitigation shifts to austerity, new business promotion falls short of expectations, etc.