Incident: The company signed the “Wuhai Ecological Construction PPP Project Contract”, with an estimated total investment of 1,433 billion yuan, accounting for 50.11% of the company's 2016 revenue; the project construction period is 1 year, and the operation period is 9 years. Orders have exploded and continued to benefit from the construction of ecological civilization: up to now in 2017, the company has signed new orders of 23.265 billion yuan, about 5.47 times the total order volume of 4.254 billion yuan for the full year of 2016; of these, PPP projects amounted to 22.346 billion yuan, accounting for 96.05%. Furthermore, the total amount of framework agreements signed by the company reached 41.15 billion yuan this year. There is strong certainty about implementation and a strong guarantee for future performance growth. The 19th National Congress emphasized that building ecological civilization is the millennial plan for the sustainable development of the Chinese nation, and the company, as a leading enterprise in ecological restoration, will continue to benefit from favorable ecological civilization construction policies in the future. The performance of the third quarter report exceeded expectations, and operating cash flow highlighted high growth: the company achieved revenue of 4,593 billion yuan in the first three quarters of this year, an increase of 146.35% over the previous year; net profit of 718 million yuan, an increase of 198.71% over the previous year. The main reason for the high performance growth is that the company's PPP projects have progressed smoothly since this year, and the increase in orders has led to a high increase in revenue. The gross profit margin was 32.68%, up 2.16% year on year; net profit margin was 16.19%, up 18.26% year on year. Net cash flow from operating activities in the first three quarters was -1,366 billion yuan, a year-on-year decrease of 152.50%. This is due to the fact that the company was in a period of rapid expansion of construction scale in the first three quarters and procured a large amount of labor, materials and construction machinery to advance the project. Negative operating cash flow indicates high growth in the company's business, which may further boost performance in the future. Outreach acquisitions and model exports confirm that the company has the ability to expand across regions: in recent years, the company has successively acquired Zhejiang Putian Garden and Xiamen Luluxing, entering the real estate garden and municipal garden fields in East China and South China, and has accelerated the expansion of its business scope throughout the country. Since this year, the two subsidiaries have successively signed projects in Fuyang, Luoyang, Hechuan and Xiamen, etc., with a total contract amount of about 1,063 million yuan, with remarkable collaborative results. Furthermore, the company is actively exporting its ecological restoration model to the outside world. This year, companies such as “Tibetan Grass Ecology”, “Jiang Cao Ecology”, “Qincao Ecology”, and “Yunnan Grass Ecology” were formed to promote the ecological wisdom and business model of “domesticating native plants to restore ecology” to more regions. At present, it has received large orders and framework agreements from places such as Lanzhou and Dali, confirming its ability to expand across regions. Core technology has helped it become a leader in the field of ecological management in the western region: the company is committed to ecological restoration, in-depth research on ecological issues such as grassland degradation, soil improvement, mine restoration, land desertification, etc., and coordinates the systematic ecological management of landscapes, forests, fields, lakes and grass. At present, about 1.1 million hectares of ecological restoration have been completed, and five major industry or national standards for restoration technologies have been summarized. It has the most complete grassland native plant germplasm resource bank in China. Currently, it has collected more than 2,400 kinds of grassland germplasm resources, more than 2,800 plant specimens, and 110,000 soil specimens. More than 160 kinds of drought-resistant plants have been domesticated and applied to actual ecological restoration processes. Due to technical barriers, the company has few competitors in the industry, and future high growth is certain. Financial forecast and valuation: The company is expected to achieve net profit of 1,07/15.25/2.161 billion yuan from 2017 to 2019, a year-on-year increase of 196.7%/51.5%/41.7%, corresponding EPS of 0.63/0.95/1.35 yuan. The current stock price corresponding to PE from 2017 to 2019 is 20.5/13.6/9.6 times, maintaining a “highly recommended” rating. Risk warning: PPP project expansion and implementation falls short of expectations, repayment risk, etc.