Incident: On October 27, 2016, the company released its three-quarter report. The company achieved operating income of 524 million yuan in the first three quarters, an increase of 391.41% over the same period last year; realized net profit attributable to listed companies of RMB 41,4734 million, loss of RMB 27.4734 million for the same period last year; basic earnings per share was 0.12 yuan, and loss for the same period last year was 0.0989 yuan. Key investment points: BT business+mergers and acquisitions of Haocheng Electric drive profit growth, which is expected to continue to gain strength. The company released its 2016 three-quarter report. The first three quarters achieved operating income of 524 million yuan, an increase of 391.41%. The reason for the change was mainly due to the increase in BT business revenue and the merger of Haocheng Electric in the current period. Net profit was 41,4734 million yuan, while net profit for the same period last year was -27.4734 million yuan, turning a loss into a profit. According to the current contract signed by the company and project progress accounting, it is based on the increase in general contracting contracts in 2016 and the consolidated profit generated by the acquisition of Haocheng Electric in 2015. It is anticipated that there will be a significant increase in profit between fiscal year 2016 and fiscal year 2015. Comprehensive layout of the new energy sector - important performance growth points: EPC projects, mergers and acquisitions, integrated investment. In the first three quarters of 2016, the company signed a turnkey project contract for a new energy power plant of nearly 250MW. The completion of the execution of all contracts will bring the company more than 2 billion yuan in revenue. On September 22, 2016, the company announced a plan to issue shares to purchase assets. It intends to acquire 100% of the shares of Wanlong Wind Power Company and Jiaxing Wind Power Company. The two companies hold a total of 95.25 MW wind power plants. The proposed purchase price is 257.6959 million yuan, which is basically equal to the total shareholders' interests of the two companies. It is estimated that the acquired power plants will contribute 30 to 35 million yuan in profit each year. In September 2016, the controlling shareholders of the company signed a “strategic cooperation agreement” with Shenzhen Qianhai China Power Investment Finance and Fund Management Co., Ltd. and China Power Investment Finance and Financial Leasing Co., Ltd. The parties plan to jointly establish a series of industrial investment funds with a total scale of 2 billion yuan within two years to invest in new energy projects jointly selected by all partners as capital. Jiuzhou Electric has priority acquisition rights for the projects invested by the funds. It is expected that the Industrial Investment Fund will bring large-scale EPC projects and mergers and acquisitions of power plants to listed companies.? Continuously optimize traditional business; acquire Haocheng Electric and strengthen technological innovation. In 2015, the company acquired 99.93% of the shares of Shenyang Haocheng Electric Co., Ltd., and the issued share price was 7.42 yuan/share. Haocheng Electric's downstream customers are mainly the State Grid and China Southern Power Grid, which complement the company's traditional business of electrical control and automation products and DC power systems. Haocheng Electric promised that the net profit for 2015, 2016 and 2017 would not be less than RMB 37.5 million, RMB 45 million, and RMB 51 million, respectively. The total net profit achieved during the assessment period was not less than RMB 133.5 million. The company will continue to upgrade products, strengthen technological innovation, control costs while improving product quality, and enhance the competitiveness of products in the market in terms of price and quality. Moreover, the company's EPC general contract will also boost sales of the company's own products and improve traditional business. Actively entering the field of energy storage and fast charging. The company has made it clear that it will make full use of the company's technical and experience to enter the energy storage and fast charging industry. In terms of energy storage, the company plans to build demonstration projects for energy storage in the company's industrial parks and the company's new energy power plants. In the field of charging piles, the company has self-developed integrated and split DC charging pile technology. With the release of favorable policies, it is expected to receive large orders. Complete restricted stock grants with equity incentives, and the goals of the majority shareholders and management are the same; the unlocking conditions are high, indicating that the company has confidence in future development. On December 18, 2015, the company completed the restricted stock grant. The grant price was 6.62 yuan, for a total of 7.676 million shares, of which the five vice presidents granted a total of 1.26 million shares. According to the unlocking conditions, in 2015-2017, the company withheld no less than 30 million yuan, 100 million yuan, and 200 million yuan in non-net profit. The company also made it clear that if the first and second unlocking periods expire and the company's current performance level does not meet the corresponding performance assessment targets, this portion of the underlying stock can be postponed to the next year and unlocked when the company's performance reaches the cumulative performance assessment target for the next year. While profit forecasting and rating companies are gradually optimizing their traditional business, they have fully entered the new energy sector; actively entered the fields of energy storage and fast charging; and equity incentives have been completed. Regardless of the impact of additional issuance, the company's 2016-2018 EPS is expected to be 0.34 yuan, 0.64 yuan, and 0.82 yuan respectively, and the corresponding valuations are 35 times, 19 times, and 15 times respectively, maintaining the “buy” rating. Risks suggest that traditional business development is lower than expected, EPC project development is lower than expected, energy storage and charging piles are progressing lower than expected, and the company's additional distribution implementation is uncertain.