Matters On December 7, 2011, Tongfang Co., Ltd. issued an announcement that it plans to join forces with Tsinghua Holdings Co., Ltd. and other strategic investors through equity participation to use TF-EPI Co., an overseas subsidiary of the company. As an investor, LIMITED jointly invested in the acquisition of 38.41% of the shares of Chongqing Guoxin Investment Holdings Co., Ltd. by participating in judicial execution. The purchase price is based on the evaluation results of 3.407 billion yuan, and fluctuates appropriately. Key points 1. The company aims to implement the “technology+capital” development strategy. After years of exploration, Tongfang Co., Ltd. has gradually formed a “technology+capital” development strategy. Technology accumulation and capital investment are carried out in emerging industries that have great prospects for development, and at the same time cultivate and support the development of industries through capital management. The acquisition of shares in Chongqing Guoxin fully reflects the company's development strategy described above. 2. The acquisition of Chongqing Guoxin is of major benefit to the company, increasing the EPS of Chongqing Guoxin in the next few years to become a large investment management company under the Chongqing State Assets Administration Commission. The net profit attributable to the parent company from 2008 to 2010 was between 600 and 1.1 billion yuan. We conservatively estimate net profit attributable to the parent company in 2012 to be 700 million yuan. After this acquisition is successful, Tongfang Co., Ltd. will account for about 19% of Chongqing Guoxin's shares, and Chongqing Guoxin will contribute more than 100 million yuan in investment income to Tongfang shares; and according to the Tongfang share acquisition plan, the company will eventually hold no less than 9.60% of the shares in Chongqing Guoxin, and about 10% of the shares will be transferred to other investors. Referring to Tongfang's acquisition of Baishitong Technology's shares (appreciation greater than 6 times), we expect that this acquisition will also obtain high premium investment returns. 3. Tongfang's performance will grow rapidly in the next few years, and the layout of the industry of companies with large room for market capitalization growth is already relatively stable, and the company's “technology+capital” development strategy is being implemented through a series of matters. We expect the 2011-2013 EPS of Tongfang Co., Ltd. to be 0.43 yuan, 0.66 yuan, and 1.00 yuan, respectively. The current stock price has a strong valuation advantage and maintains a “push” rating. Risk Reminder 1. There is uncertainty about when investment returns from capital operations will be confirmed.