Key investment event: The company acquired 100% of DHT's shares for $7.36 million. Our comments on this are as follows: the acquisition of water expert DHT, international mergers and acquisitions to the next level, and the multi-dimensional expansion of technology+market. The company acquired 100% of DHT's shares for $7.36 million. DHT currently has total assets of US$19996 million, total liabilities of US$505.47 million, and owners' equity - US$305.51 million. Prior to the equity settlement of this transaction, DHT's original shareholders and related entities will be responsible for clearing $45 million of short-term loan liabilities. DHT is an international company that specializes in providing zero-discharge engineering design, technical services and membrane technology, equipment, and equipment assembly and automation solutions for seawater desalination, municipal sewage treatment, water plants and oil fields. It has strong seawater desalination technology capabilities. Typical projects include the Jeddah desalination project (400,000 tons/day). DHT has more than 200 design projects in 25 countries, covering the municipal and industrial sectors; it has a global business network with good markets not only in the mainland US, but also in Southeast Asia, South America, the Middle East and Africa; and has good long-term partnerships with international EPC general contractors and engineering companies. DHT has won various international awards and honors many times, such as the 2008 Outstanding Seawater Desalination Company of the Year by GWI and the 2015 Outstanding Reclaimed Water Reuse Project of the Year by GWI. Pay attention to the poor expectations brought about by international mergers and acquisitions! The company has successively acquired KWI, the world leader in solid-liquid separation-dissolved gas flotation (DAF) technology. It took a 21.6% stake in Swiss Water, obtained IDE's ownership of seawater desalination membrane technology, low-temperature multi-efficiency seawater desalination technology (MED), and zero-discharge wastewater treatment technology (ZLD), and acquired iTN, a company listed on the Frankfurt Stock Exchange in Germany, which has the most advanced nanoplate ceramic membrane technology in the world, and DHT, an international water expert. We emphasize the lack of expectations brought about by international mergers and acquisitions: the current market understanding of international mergers and acquisitions still lies in the technological integration of the water treatment industry chain; however, companies can expand their global water treatment business through KWI, Swiss Water, etc. This is currently not receiving enough attention in the market. Seawater desalination business: Orders continued to be placed, and the 13th Five-Year Plan ushered in a critical point of industry explosion. Currently, the revenue from the seawater desalination business mainly comes from the construction of seawater desalination projects in Cangzhou, with a total project investment of 850 million yuan. We believe that the seawater desalination industry has reached a critical point of explosion in the context of the “13th Five-Year Plan” power market-based reforms. Baan used resources such as KWI, Swiss Water, and ITn to obtain desalination technology reserves and market channels. On the domestic side, the company's Cangzhou seawater desalination PPP project (100,000 tons/day) has entered the project installation stage; a PPP strategic cooperation framework agreement of 100,000 tons/day for the seawater desalination project in Xianrendao Energy and Chemical Zone in Yingkou City was signed earlier, with a total investment of 850 million yuan. The company joined hands with Qingdao Water and Guizhou Water to land the 1 billion yuan Qingdao Blue Valley Seawater Desalination Industrial Park. Subsequent technology integration and market expansion are still worth the market's expectations! Water PPP business: After the completion of the Liupanshui project, the demonstration effect was remarkable, and orders continued to be placed. Currently, the Liupanshui Sponge City Project (total investment is 1,668 million, including 878 million construction contracts and 800 million demolition contracts; 80.57% of construction contracts have been completed) is nearing completion, and the demonstration effect is remarkable. Currently, the company is actively promoting the construction of the Shandong Tai'an Project (1.3 billion) and the expansion of offsite markets. In October, the company won the bid for the PPP project for sewage treatment and pipeline network projects in Longlou Town District and Tongguling Tourist Area in Wenchang City, Hainan Province, with a bid amount of 65 million yuan. The project has a franchise period of 30 years and has been recommended by Hainan Province to the Ministry of Finance in conjunction with 20 ministries and commissions and assessed as one of the third batch of national PPP demonstration projects. Employee stock ownership plans are superimposed on equity incentive plans, and the incentive system is strong. On April 6, the company announced the employee stock ownership plan for 7 incentive targets, of which the number of senior directors and supervisors is 6, and the investment amount accounts for 93% of the total investment amount (150 million yuan); the employee stock ownership plan funds fully subscribe to the relevant trust plan secondary shares, with priority and secondary settings on a 1:1 basis. Currently, the company has completed the formal award of incentive shares to 36 executives, of which the restricted stock grant price is 6.96 yuan/share, and the stock options exercise price is 14.08 yuan/share. The performance target is 1.4/2.1/ 30/380 million yuan, strong incentive system! Investment advice: maintain an accumulation rating! The profit forecast for 17-18 is 220 million to 320 million, and the current market value is 6.8 billion yuan. We emphasize: 1) the seawater desalination and sponge city PPP business continues to gain strength, actively building new hazardous waste business fields, and performance continues to increase or is only the beginning; 2) employee shareholding+restrictive incentives to complete the binding of executive interests; high exercise conditions give performance anchors, sufficient orders in hand guarantee high growth; 3) international outreach is only the beginning, intensive bidding of Belt and Road water projects, and another breakthrough in international strategy; 4) Non-public offering raised 1.2 billion dollars, and new orders and new orders may accelerate; maintain growth ratings. Risk Warning: Project progress falls short of expectations