Incident: The company plans to invest no more than 10 million yuan, accounting for no less than 30% of shares, and join with senior management teams in the Japanese chemical industry to invest in the establishment of an investment management company; in the future, it will establish a Japanese chemical industry investment fund with an investment company as the sponsor, and initially plans to raise 1 billion yuan in capital for strategic investment in the daily chemical industry and emerging green and environmental protection industries, providing important channels and tools for the company to implement industrial integration in the future. Comment: Investment advice: By investing in the establishment of an investment management company, the company can make full use of industrial capital to achieve the extended development of the enterprise through investment and mergers and acquisitions. We believe that with many years of operating experience in the daily chemical industry and the resource advantages of the parent company Light Industry Group, the company is expected to extend upstream and downstream of the supply chain and drive industry integration through external mergers and acquisitions; at the same time, with the recent introduction of the Guangzhou State-owned Enterprise Reform Plan, the company's expectations for high-quality asset integration as the sole listing platform for Guangzhou Light Industry Group have been further strengthened. In the future, the company is expected to use state-owned enterprise reforms to bring high-quality asset integration+industrial fund extension mergers and acquisitions, and build a large platform for Langqi Daily Chemical through a two-pronged approach. Maintain the company's 2015-2017 EPS: 0.26/0.49/0.64 yuan, maintain the target price of 20.8 yuan and the “increase in holdings” rating. The Daily Chemical Industry Fund helps the development of epitaxial development, and expansion upstream and downstream of the supply chain can be expected. In recent years, the company has taken advantage of its position in the industry to actively expand its chemical trading business and expand upstream and downstream of the daily chemical industry. The company's Qihua Network is the largest chemical spot electronic trading platform in China. The company now plans to participate in investing in the establishment of an investment management company, and plans to use this as the sponsor to set up a daily chemical industry investment fund. The first phase is expected to raise no more than 1 billion yuan in capital, mainly investing in high-quality potential companies in the Japanese chemical industry. The company is expected to utilize industrial capital and intervene in high-quality upstream and downstream companies in the daily chemical industry supply chain in the early stages to obtain investment income while providing high-quality project options for the company's further mergers and acquisitions. Guangzhou's state-owned enterprise reform plan was introduced to strengthen asset integration expectations and build a large platform for Langqi Daily Chemical through a two-pronged approach. Guangzhou's state-owned enterprise reform plan has been officially introduced, clarifying the reform goals, road map and schedule, and by 2020, competitive municipal state-owned enterprises may all be listed as a whole. The company is the only listing platform under Guangzhou Light Industry Group. Guangzhou Light Industry Group's revenue in 2014 was nearly 40 billion yuan; it owns famous brands such as Langqi, Pisces, Heimei, and Wuyang Watch. The company previously announced a fixed increase plan to introduce strategic investors and employee stock ownership plans. Currently, the fixed increase plan has been accepted by the Securities Regulatory Commission. As reforms advance, the company's asset integration is expected to be further strengthened. The company is expected to use state-owned enterprise reform to bring high-quality asset integration+industrial fund extension mergers and acquisitions, and jointly build a large platform for Langqi Daily Chemical in a two-pronged approach. Risk warning: progress in setting up an industrial fund has been blocked; the reform of state-owned enterprises has fallen short of expectations. Guotai Junan All rights reserved. Send to Donghai Fund Management Co., Ltd. (in preparation). Public email: dhjjty@donghaifunds.comp 1