Utilities and financial ventures go hand in hand. The company's predecessor was “Shanghai Pudong Volkswagen Taxi Co., Ltd.” founded in 1991. The company was listed and traded on the Shanghai Stock Exchange in 1993. Currently, the company's main business involves five sectors: urban pipeline gas, sewage treatment, public infrastructure, urban transportation, and financial venture capital. In 2015, the company achieved total revenue of 4.571 billion yuan and net profit of 461 million yuan, up 10% and 35% year-on-year respectively, and gross profit margin of 14.90%, up 3.65 percentage points year-on-year. In recent years, the company's net interest rate has continued to rise, the balance ratio and asset turnover ratio have continued to decline, and ROE has remained stable. The company's shareholding structure is stable. The top two shareholders account for 22.53%, and all other holdings are below 1%. Yangtze River Delta gas faucets are actively expanding through mergers and acquisitions. The company's pipeline gas business covers Shanghai, Nantong, and Taicang. It is the only pipeline gas supplier in southern Puxi of Shanghai. It is the dominant natural gas supplier in Nantong. By holding Suchuang gas, it has about 2.23 million end users, 1 billion cubic meters of gas sales, and 8,225 kilometers of underground pipelines. The company is still actively expanding its pipeline gas business to cities surrounding the Yangtze River Delta. In June 2016, Volkswagen Public Corporation acquired 19.76% of the shares in the Hong Kong-listed gas company “Suchuang Gas”, becoming its second-largest shareholder. Suchuang Gas was listed on the Hong Kong Stock Exchange in March 2015. It is the main pipeline gas operator in Taicang City, Suzhou, Jiangsu Province. In 2015, it achieved revenue and net profit of 795 million yuan and 138 million yuan respectively, up 1.3% and 19.1% year-on-year respectively. Through this acquisition, the company can cover and connect the gas pipelines in Shanghai, Taicang and Nantong to form a synergy effect. Financial venture capital creates a new growth pole. The company has four venture capital platforms: Volkswagen Capital, Shenzhen Venture Capital, Hangxin Investment, and Xingye Venture Capital, and also invests in financial enterprises such as financial leasing, microfinance companies, banks, and securities companies. In 2015, the company's venture capital contributed a total of 135 million yuan in investment income, accounting for 24% of total profit. “Shenzhen Venture Capital”, which holds 13.93% of the company's shares, is the largest venture capital company in China. Its success stories include more than 80 domestic and foreign listed companies, including LeTV Network and ZTE. In 2015, Shenzhen Venture Capital achieved a net profit of 1,012 million yuan, contributing 127 million yuan in investment income to Dazhong Utilities, accounting for 22% of Dazhong's total profit and 19% of investment income for the year. At the same time, Dazhong Capital, a public subsidiary of Dazhong, holds 12.5% of the Chinese Cultural Industry Fund. It is the first cultural industry private equity fund to be registered and approved by the National Development and Reform Commission. As of the end of 2015, the total scale was about 30 billion yuan. Successful cases include Star TV, Oriental DreamWorks, IMAX China, Guevara, etc., and is a well-deserved giant in the field of culture and entertainment investment. High-quality venture capital finance projects reserve abundant resources for the company's future high growth. Profit forecasting and valuation. The company is expected to achieve net profit of 6.67 billion yuan, 9.55 billion yuan and 1,247 billion yuan in 2016-2018, corresponding EPS of 0.23, 0.33, and 0.43 yuan/share, respectively. Referring to comparable company valuations, considering the dual growth poles of the company's gas business and financial venture capital business, the company was given 40 times PE in 2016, corresponding to a target price of 9.2 yuan/share, and given a purchase rating. Risk warning. (1) Gas prices have changed, and the company's gross margin has declined; (2) competition in the water industry has intensified; (3) The financial venture capital business is greatly affected by the capital market, and earnings fluctuate greatly.