Commercial City (600306.CH/RMB 12.40, purchase) Announcement: 1) The company plans to issue 112,951,807 shares to purchase 100% of Yicheng Investment's shares (price per share is 13.28 yuan) held by Yicheng Investment with an estimated asset valuation of 1.5 billion yuan; 2) The company plans to non-publicly issue 105,421,683 shares to 6 specific investors, Zhang Zhenxin, Cai Fang, Liu Puzhang, Li Jianqun, and Lizihui Investment. After deducting the issuance fee, the company plans to expand the new private car platform business on the Internet Purchase, information system construction, and supplement the working capital of listed companies and supplement the working capital of listed companies. After the transaction is completed, the company's share capital will increase by 218,373,490 shares, accounting for 55.07% of the company's total share capital after issuance. After the transaction is completed, the actual controller of the company will be changed from Huang Maoru to Zhang Zhenxin. Zhang Zhenxin and his co-actors, Yisheng Investment, and Liqun together held 42.74% of the company's total share capital after the issuance was completed. The lockdown period for this issue of shares is 36 months. Comment: The business model has changed from traditional commercial services to a new business service model: As the company has been affected by macroeconomic downturn, e-commerce shocks, etc. in recent years, revenue growth is weak, and there is no sustainable profitability. After the acquisition of Yi Car Rental Network, the company's main business will be based on a highly profitable car rental business, covering the vehicle networking industry with closed loop services throughout the life cycle from vehicle procurement to disposal. The leasing business of Yiche Rental has covered 27 key cities across the country. It has professional driver behavior analysis and advanced technical systems such as real-time fleet positioning, monitoring and dispatch management, and relies on the Internet of Vehicles to provide customers with comprehensive travel solutions. The injection of new business will effectively help the company complete the transformation from traditional retail business. Yi Car Rental Network is committed to becoming an O2O service platform based on providing customers with comprehensive travel management solutions. The company currently has 2,192 self-operated vehicles, and has professional driver behavior analysis and advanced technical systems such as real-time fleet positioning, monitoring and dispatch management, etc., and its business scope covers 27 cities across the country. The company mainly provides services for enterprises and institutions, including Internet ride-hailing platforms, such as vehicle network management and technology research and development, vehicle rental franchisee services, driver recruitment, management, training, and used car evaluation and appraisal. It is worth noting that with September 30, 2015 as the evaluation reference date, the unaudited equity belonging to the parent company of Yi Car Rental Network is 342.1771 million yuan. The estimated 100% equity valuation of Yi Car Rental Network is about 1.5 billion yuan, with a value-added value of about 115,78229 million yuan. The value-added rate is about 338.37%, and the value-added rate is high. Valuation: After the acquisition of the company is completed, the main business will change from traditional commercial retail business to an emerging commercial service business that relies on vehicle mobility tools to serve institutional customers and end consumers through Internet functions. This business transformation allows the company to enjoy a high valuation premium, but since there are no specific arrangements for profit compensation that may exist during the profit guarantee period, we will not dilute our share capital for the time being, maintain the company's 2015-17 earnings forecast of -0.9 yuan, -0.7, and -0.4 yuan, respectively, maintain a target price of 20.50 yuan/share, maintain the purchase rating, and adjust the company's profit forecast and share capital after the company announces the specific arrangements for profit compensation that may exist during the profit guarantee period.