The performance for the first half of the year fell short of expectations. The company issued a semi-annual performance forecast. In the first half of 2017, the net profit of the parent company was about 0.57-069 million yuan, an increase of about 0%-20% over the previous year, and the net profit after deducting non-return from the mother was about 0.45 to 57 billion yuan, an increase of about -13%-9% over the previous year, slightly lower than expected. The company's business blossomed a lot in the first half of the year. The kitchen project received its first order, and the soil restoration business entered the northwest market for the first time. The strategic layout is progressing steadily. The growth rate is expected to increase in the second half of the year, and the annual performance growth forecast remains unchanged for the time being. Ultra-low emissions free up market space, and multiple orders guarantee growth. The company provides flue gas treatment technology and services such as desulfurization, decontamination, and dust removal for coal-fired units, non-ferrous steel kilns, etc. in the field of atmospheric treatment. It has accumulated rich project experience and technical accumulation, and has won market recognition. Since the implementation of policies such as the “Notice on Issues Relating to the Implementation of Ultra Low Emission Electricity Price Support Policies for Coal-fired Power Plants”, the atmospheric treatment market has continuously released space for flue gas treatment and transformation. In 2016, the company's atmospheric treatment business revenue was 720 million yuan, an increase of 23.8% over the previous year. In the first half of 2017, it won bids for Guodian Yuanbaoshan Company and Shenhua Guoneng Ewenke Power Plant ultra-low emission projects, with a total order volume of 150 million yuan, accounting for 10% of 2016 revenue. It is expected that under the “13th Five-Year Plan” air pollutant emission limits that have been tightened, the company's air treatment business will continue to receive orders in the second half of the year to ensure growth. The first soil restoration project in the northwest was signed, and the strategic layout is steadily advancing the “Soil Pollution Prevention and Control Action Plan” issued by the State Council in May 2016. The goal is that by 2020, the safe utilization rate of polluted arable land nationwide will reach more than 90%, and the safe utilization rate of polluted land will reach 90%, opening up 100 billion market space in the soil restoration market. The company is the first listed environmental protection company in China to establish a soil restoration research institute and various subsidiary companies to promote soil restoration business. In early July, the company announced the signing of the “General Contract for Heavy Metal Pollution Remediation and Ecological Remediation Projects in the Dongdagou Basin in the Baiyin Section of the Upper Yellow River”, with a contract amount of 100 million yuan. This project is the first major soil restoration project the company undertakes in the northwest region. It shows that the company's national key layout strategy for soil restoration is beginning to show results, and is expected to become a new performance growth point in the future. The profit forecast was lowered to maintain the “increase in holdings” rating in the first half of the year. Businesses such as atmospheric purification, heavy metal restoration, environmental consulting, new energy, and operations progressed normally. The main business, air purification, won many bids. The three new energy photovoltaic projects were connected to the grid, the soil business entered the northwest market, and the kitchen business won the first order, optimistic about the company's subsequent development. Based on the stable performance of the company's main business, the normal progress of the business layout, and the moderate growth rate of 1H2017 net profit, we slightly lowered our profit forecast. It is estimated that the company's net profit for 2017/2018/2019 is 1.9/2.6/300 million yuan, EPS is 0.30/0.40/0.47 yuan, and the current stock price corresponding to 2017-2019 PE is 37.40/27.94/23.84 times, with reference to comparable companies 46 times 2017 PE, and the adjusted target price is 11.57-12.17 yuan (corresponding to 2017) 39-41 times target PE), maintaining the “increased holdings” rating. Risk warning: The risk of the project not progressing as expected.