Incident: Big Wisdom announced that it and its subsidiary Caihui Technology will purchase 100% of the shares of Xiangcai Securities by issuing 1.356 billion shares and paying 298 million yuan in cash. The valuation value of 100% of the shares of Xiangcai Securities is about 8.5 billion yuan. Among them, Caihui plans to use 298 million yuan in cash to purchase 111,903,956 shares of Xiangcai Securities held by Xinhu Holdings. The company plans to purchase the remaining 3,085,351,922 shares by issuing shares from 16 companies, including Xinhu Holdings and State Grid Yingda, at an issue price of 6.05 yuan/share. At the same time, the company plans to raise supporting capital by issuing shares to no more than 10 other specific investors, with a scale not exceeding 2.7 billion yuan. Comment: The company is the leading Internet financial information service platform in the industry. Since its listing, the company has continuously increased its investment in technology and services through endogenesis and extension to provide users with comprehensive and stable financial information services. Currently, it has hundreds of millions of registered users and 20 million monthly active users. It is in a leading position in the industry in terms of both the number of registered users and the number of active users, and has a huge base of Internet financial users. It acquired Xiangcai Securities and became the first Internet company in China to have a brokerage license. Xiangcai Securities is the first national comprehensive securities company. As of the end of 2014, Xiangcai Securities had 53 securities sales departments in 41 large and medium-sized cities across the country, providing securities brokerage services to about 700,000 investors nationwide. Brokerage clients have managed assets of 150 billion yuan. Its business scale and comprehensive competitive strength have increased year by year, and it has a certain influence in the industry. After the company acquires Xiangcai Securities, it will become the first Internet company in China to have a brokerage license. Equity binding deeply creates a closed loop for Internet brokerage firms. After the acquisition is completed, the company and Xiangcai Securities will carry out in-depth strategic cooperation. The company has a huge base of Internet users, and has sufficient accumulation in financial information service capabilities and big data technology. It will integrate with the traditional brokerage business of Xiangcai Securities to actively build a one-stop Internet financial service platform that is guided by user needs, centered on asset management, and integrates financial services such as information, information, trading, sales, and financial management. Investment advice: As the leading Internet financial information service platform in the industry, after acquiring Xiangcai Securities, the company will combine the resource endowments of both parties to create a leading Internet financial platform in China, with broad prospects. Considering the annual exam preparation for Xiangcai Securities, the 2015-2017 EPS is expected to be 0.19, 0.3, and 0.46 yuan respectively, giving a “buy-A” investment rating for the first time, with a target price of 15 yuan for 6 months. Risk warning: integration risk, risk of Internet brokerage business falling short of expectations.