Incident 1: On the evening of April 27, the company announced its 2017 annual report, achieving revenue of 2,470 billion yuan, up 104.1% year on year; realized net profit of 1,014 billion yuan, up 158.45% year on year; net profit after deduction was 1.03 billion yuan, up 192.38% year on year. The profit distribution plan is a cash dividend of 1.17 yuan (tax included) for every 10 shares. Incident 2: The company also published a quarterly report, achieving revenue of 465 million yuan, an increase of 7.61% year on year; net profit to mother of 184 million yuan, an increase of 13.67% year on year; net profit after deduction of 151 million yuan, a decrease of 6.05% year on year; and basic earnings per share of 0.21 yuan. Key investment points The main product revenue grew rapidly. The diversified business began to expand by product. The first circuit pipeline revenue for nuclear power plants was 569 million yuan, +268%, accounting for 23%; revenue for new products container equipment and forgings was 799 million yuan, accounting for 32%; revenue for other nuclear power equipment was 210 million yuan, +333%, accounting for 8%; revenue for nuclear grade materials was 276 million yuan, -28%, accounting for 11%; petrochemical equipment product revenue was 306 million yuan, +147%, accounting for forged products; Received 155 million yuan, +48% year-on-year, accounting for 6%; revenue for complete converter equipment was 125 million yuan, +15% year-on-year, accounting for 5%. The reason for the high revenue growth rate is partly due to the company's transformation from single-material R&D and production to high-end equipment manufacturing through technological innovation and introduction. The company has developed the manufacture of reactor pressure vessels, evaporators, voltage regulators, main pipes and reactor components, pump valve components, etc.; it has realized the manufacture of steam reforming system equipment, and promoted the company's performance growth. On the other hand, demand in the civilian nuclear power market and nuclear waste post-treatment market has increased dramatically, and business diversification has driven the company's performance growth. Profitability increased dramatically, and the period expense ratio decreased by 67.93% in 2017 to +10.74pct year-on-year. The gross profit margin of the main circuit of a nuclear power plant was 75.33%, +25.71 pct compared to the previous year; the gross profit margin of container equipment and forgings for the new business was 88.02%. Along with the company's technological upgrades and the launch of new businesses, the company's profitability has increased dramatically. During the reporting period, the company's expense ratio for the period was 12.91%, -5.42pct; of these, the sales expense ratio was 0.72%, the management expense ratio was 6.46%, and the financial expenses ratio was 5.74%, -0.09pct, -1.93pct, and -3.39pct, respectively. At the same time as the company's profitability increased, the cost rate declined during the period, and its ability to control costs was strong. There is plenty of room for nuclear power development. The future will fully benefit from Belt and Road construction. According to China's medium- to long-term nuclear power construction plan, the total installed capacity of nuclear power in operation and under construction in China will reach 88 million kilowatts in 2020. According to data from the China Nuclear Energy Industry Association, by the end of 2017, China had 37 nuclear power units in operation, with a total installed capacity of 35.8 million kilowatts, an increase of 7% over the previous year, ranking fourth in the world; 20 nuclear power units were under construction, with an installed capacity of 22.87 million kilowatts. The power generation capacity was 247.469 billion kilowatt-hours, an increase of 18% over the previous year, accounting for 3.94% of the country's total power generation, ranking third in the world. The Association expects to start construction of 6 to 8 third-generation nuclear power units every year in the coming period. By 2020, the world will build about 130 new nuclear power units, reaching about 300 by 2030. Among them, the “Belt and Road” countries and neighboring countries will account for about 80% of the number of newly built units. We judge that as the only domestic private enterprise that is deeply involved in the main equipment supply system for nuclear islands, the company will fully benefit from the restart of nuclear power project approval and nuclear power construction in countries along the Belt and Road in the next few years. The expansion of the nuclear reprocessing equipment market has been effective, driving performance growth. Along with the rapid development of nuclear power, reprocessing of nuclear waste is imminent. China's nuclear waste disposal construction lags behind the construction and operation of nuclear power plants. As a result, large amounts of nuclear waste have been piled up in operation at nuclear power plants. According to the company's estimates, if recycling plant construction is not taken into account, the overall market space for nuclear waste treatment will exceed 15 billion yuan/year over the next 5 years, of which operating expenses will exceed 9 billion yuan/year; if recycling plant construction is considered, the overall market space will reach nearly 30 billion yuan/year. Currently, demand for nuclear waste disposal is huge. The first year of the full-line explosion is imminent. The Taihai Group has mastered key technologies for nuclear waste treatment, bringing market space to the company, thereby driving performance growth. Profit forecast and investment advice: The EPS for 2018/19/20 is expected to be 1.48/1.98/2.42 yuan, respectively, and the corresponding PE is 18/13/11X. Due to the current suspension period, no investment rating will be given. Risk warning: The construction progress of the nuclear power plant is lower than expected; it is in the period of suspension of major asset restructuring.