Key investment points: The natural gas business developed rapidly, and the performance in the first quarter increased significantly. Shengli Co., Ltd. announced its first-quarter results forecast. Net profit was 52 to 56 million yuan, up 540.28% to 589.53% year on year. The main reason is that the operating income of the company's natural gas business was about 300% of the same period last year, and the transfer of shares in subsidiary Lu Yu Trading to achieve investment income, which led to a significant increase in the company's performance in the first quarter. Results declined in 2015 due to the overall economic situation. The company released the 2015 annual performance report, achieving operating income of 2,496 billion yuan, -13.11% year-on-year; net profit of 30.251 million yuan, -17.58% year-on-year. Affected by the overall economic situation, the company's gross margin declined significantly. Use terminal resources to develop automobile charging and switching services. In order to develop new energy business, Shengli Co., Ltd. and Qingdao Teruide signed a “Strategic Cooperation Agreement” to jointly promote strategic cooperation in the field of automobile charging. This strong joint effort began in terminal fields such as gas stations owned by Shengli Co., Ltd. to promote new energy vehicle charging business cooperation. Through this strategic cooperation, the company will enter the field of automobile charging and switching, build a multi-level new energy supply system using the existing market terminal network, and open up new business growth points. Change the use of capital raised and develop natural gas pipeline network business. In order to adapt to changes in the market environment and accelerate the development of natural gas business, the company decided to change the use of capital raised to supplement the working capital required for the compressed development of natural gas business in Qingdao Runhao and Dongtai, vigorously promote and develop the natural gas pipeline network field with larger profit margins, higher profit stability, and better development prospects, and improve the efficiency of the use of capital. The total investment amount for the new gas station project of Qingdao Runhao and Dongtai Compression was 60.87 million yuan. The company decided to use all of this investment amount to permanently supplement the working capital required for the development of the natural gas business of Qingdao Runhao and Dongtai. Entered the Bazhou natural gas market. The company signed a cooperation agreement with Bazhou Shunda Natural Gas to jointly develop and operate Bazhou natural gas business. At present, the commercial registration and bank account opening procedures for Bazhou Shengli Shunda Gas, a natural gas specialist company newly established by both sides, have been completed, and has entered trial operation. Shengli Co., Ltd. used 168.3 million yuan in cash to transfer 51% of Shengli Shunda Gas's shares to achieve control. Expand the natural gas market in the Tohoku region. In order to speed up the cultivation of natural gas business and expand the natural gas market in Northeast China, the company signed agreements with Dalian Yimin, Pulandian Yimin, etc., to jointly develop and operate natural gas business in Pulandian, Puwan, and Zhuanghe, Dalian. The agreement stipulated that the counterparty would inject high-quality natural gas assets into Dalian Shengyi and Zhuanghe Shengyi respectively. The company acquired 51% of the shares of Dalian Shengyi and Zhuanghe Shengyi at no higher than 48.45 million yuan and 25.5 million yuan, respectively, and became its controlling shareholder. Profit forecasts and investment ratings. We expect the EPS of Shengli Shares from 2015 to 2017 to be 0.04, 0.40, and 0.32 yuan respectively. According to the 2016 EPS and a price-earnings ratio of 20 times, we gave the company a target price of 8.00 yuan to maintain the “increased holdings” investment rating. Risk warning: transformation risk; natural gas business development progress falls short of expectations, etc.