Events: The company's recent announcement: 1) In the 2019 annual report, during the reporting period, the company achieved revenue of 1,336 billion yuan, an increase of 29.28% over the previous year, realized imputed net profit of 111 million yuan, an increase of 19.94% over the previous year, and realized imputed net profit of 103 million yuan, an increase of 13.43% over the previous year; 2) The 2020 quarterly report achieved revenue of 184 million yuan, an increase of 21.53% over the previous year, and achieved imputed net profit of 229.544 million yuan, an increase of 149.54% over the previous year, and achieved imputed net profit of 2294.23 million yuan after deduction Ten thousand yuan, an increase of 148.75% over the previous year. In response, our comments are as follows: Key investment points: The 19.94% increase in performance in 2019 is in line with expectations, and business conditions have improved. In 2019, the company achieved revenue of 1,336 billion yuan, an increase of 29.28% over the previous year, realized imputed net profit of 111 million yuan, an increase of 19.94% over the previous year, and achieved net profit of 103 million yuan after deductions, an increase of 13.43% over the previous year, in line with market expectations. By business: operating business achieved revenue of 363 million yuan (+63.18%), gross profit margin of 41.78%, year-on-year increase of 7.60 pct; environmental infrastructure construction services achieved revenue of 606 million yuan (-2.01%), gross profit margin of 22.80%, year-on-year increase of 0.21pct; technology product sales achieved revenue of 158 million yuan (+49.93%), gross profit margin of 35.94%, a year-on-year decrease of 2.08pct; comprehensive environmental management services achieved revenue of 210 million yuan (+138.44%), gross profit margin 29.74%, a year-on-year decrease of 13.73 pct. The company's consolidated gross margin was 30.60%, up 2.16 pct year on year; accounts receivable was 478 million yuan, accounting for 16.33% of total assets, down 2.81 pct from 19.14% in the same period last year. Net cash flow from operating activities was $266 million, a year-on-year increase of 620.69%. The sharp improvement in cash flow was mainly due to the selection of high-quality projects and enhanced management of accounts receivable. There was a sharp increase in technology products and steady growth in operating business. The increase in gross margin led to a sharp increase in Q1 performance. By strengthening communication with the government in the first quarter, the company's operating business was not affected, achieving revenue of 81.60.39 million yuan, an increase of 5.46% over the previous year. Environmental technology products achieved a significant increase in sales and contributed significantly to profit growth. Although environmental infrastructure construction and comprehensive environmental management services were affected to a certain extent, the company strengthened the screening of projects and management of projects under construction, the gross margin for the first quarter reached 45.66%, an increase of 10.34pct over the previous year. Steady growth in operations, environmental infrastructure construction, and comprehensive environmental management services, combined with significant sales increases in high-margin technology products, led to a sharp increase in the company's net profit of 149.54% in the first quarter. Actively reserving technology+expanding regional layout is poised to go. Sufficient orders and guaranteed business growth. In the middle of the industry's winter, on the one hand, the company is selecting projects and investing carefully, and on the other hand, it is also actively making technical reserves and regional layout to prepare momentum for future development. The company has mastered technologies such as the “Denitrification Deep Bed Filter Carbon Source Intelligent Precision Dosing System” and “Alkaline Stable Drying Treatment of Sludge”, actively implemented the urban and rural ecological complex model, and undertook the new “Beijing-Tianjin-Hebei Groundwater Pollution Characteristics Identification and Systematic Prevention Research” project in the 13th Five-Year Plan, etc., and continuously consolidated and improved technology. Adhering to the principle of regional management, the company has now built regional service agencies such as Hebei, Henan, Anhui, and northwest China, and has gradually begun to harvest: since 2019, the company has successively signed Mercedes-Benz projects (53.3 million yuan), Tangyin County agricultural toilet (amount undetermined) projects, Langfang Guangyang projects (89.05 million yuan), Langfang Laolonghe project (124 million yuan), Urumqi project (682 million yuan), Qinghe County Lanbi Sewage Plant PPP project (107 million yuan), Langfang rural district (107 million yuan), Langfang Anci district Sewage EPC project ( 72 million yuan), etc. At the end of 2019, ongoing non-operating orders exceeded 1.3 billion yuan, a year-on-year increase of 92.62%, and 2020Q1 signed new orders of 108 million yuan. Sufficient on-hand orders provided a guarantee for the company's future performance growth. Profit forecast and investment rating: Maintaining the company's “overweight” rating. Due to the company's strict control of projects and progress, and the style is relatively cautious. In line with the company's latest annual report, we slightly lowered the company's profit forecast. We expect the company's EPS for 2020-2022 to be 0.98, 1.20, and 1.50 yuan respectively, corresponding to the current stock price PE of 16, 13, and 10 times, respectively. The current valuation level is basically the same as the previous report, so it maintains the company's “increased holdings” rating. Risk warning: risk of project expansion and execution falling short of expectations; risk of significant increase in accounts receivable; risk of rising interest rates; risk of reduction in shareholders' holdings; downside macroeconomic risk.