On the evening of May 29, the company announced that it plans to issue no more than 150 million shares and raise no more than 600 million yuan in capital. The capital raised will be used to improve the company's major tourism industry chain. Of this, 350 million yuan will be invested in the Zhangjiajie Huatiancheng Hotel supporting facilities construction project, and no more than 50 million and 20 million yuan will be used to acquire 100% of the shares of Huatian Property owned by the controlling shareholder, 52.49% of Huatian International Travel's shares, and the remaining 180 million yuan will be used to supplement the working capital of the main hotel business. Non-disclosure will further improve the company's major tourism industry chain: business travel consumption has gradually slowed due to restrictions on three public consumption restrictions. Since the 45 star hotels that the company has now opened are mainly middle and high-end business hotels, the impact has been great since the company's hotel business revenue and gross profit fell 15.47% and 16.16% year on year, respectively. Meanwhile, national leisure tourism consumption has shown a strong growth trend. The company has steadily expanded the scale of tourist hotels by building a new Zhangjiajie Huatiancheng Hotel and supporting cultural and performing arts center in Zhangjiajie, a tourist hotspot. Additionally, the acquired travel agencies and property management have a good synergy effect with the company's main business, thus further improving the company's major tourism industry chain and enhancing the competitiveness of the company's main business. Project highlights: As a more mature national 5A scenic spot, the Zhangjiajie Scenic Area has seen varying degrees of annual traffic growth, and demand for hotels and entertainment shows is strong. The company's current hotel project has a superior geographical location and complete supporting facilities. After the hotel operation enters a mature period, the hotel service business is expected to achieve operating income of 220 million yuan, net profit of 30 million yuan, supporting cultural and performing arts annual revenue of about 60 million yuan, and net profit of 16 million yuan. Travel agencies and property management companies now have a certain scale and popularity in the region. The revenue of travel agencies in '13 is 360 million yuan. Huatian Property achieved net profit of 2.1272 million yuan and 386,200 yuan through asset-light exports in '13 and the first quarter of '14. Both companies can increase the company's stable cash flow and profit, and have good synergy with the company's main operations. Non-public offering relieves financial pressure: In recent years, the company's rapid pace of expansion has led to a large amount of capital expenditure, which has led to a yearly increase in the debt ratio. As of March 31, 2014, the company's total liabilities were 6.313 billion yuan, and the balance ratio reached 77.02%. It is at a high level in the industry, and short-term loans have reached 1.19 billion yuan. The liquidity ratio is only 0.24, and the financial pressure is heavy. The 180 million yuan raised in this non-public offering will supplement the working capital of the main hotel business, optimize the company's capital structure, effectively reduce the debt ratio (down to about 72%), and ease the financial pressure the company is currently facing, thereby enhancing the company's ability to withstand risks and continue to operate. Related transactions highlight the Group's overall listing expectations: Huatian International Travel and Huatian Property acquired by the company this time are two important enterprises under the actual controller Huatian Industrial Holding Group Co., Ltd. Although the net assets of the two companies are low, they have formed a certain asset scale and strong profitability. This time, the group has injected all of its shares into the company to effectively reduce recurring related transactions, and second, to improve the large tourism industry chain of listed companies, enhance the company's ability to integrate resources, and create new profit growth points for the company. Third, it highlights the group's overall listing expectations. Profit forecast: With the company's new asset operation business in '13, the existing assets have been revitalized, new impetus has been injected into the company's continuous development, maximized asset appreciation brought about by hotel capital operations, and provided the foundation for the company's “heavy capital, light asset” innovative business model, and supported the strategic expansion of “hotel+real estate+tourism”. We expect the company's 2014-2016 EPS to be 0.21 yuan, 0.28 yuan, and 0.35 yuan respectively, and the corresponding PE is 34X, 26X, and 21X respectively. For the first time, we have given a “prudent recommendation” rating risk warning: private projects do not meet expectations, asset operations fall short of expectations, major natural disasters, and epidemics, etc.