Incident: The company plans to use a total of 1.01 billion dollars in cash+equity to acquire 86.5% of the shares of Xiaozi Technology (610 million yuan) and 90% of the online and offline shares of Wuxi (400 million yuan), of which the equity consideration will be 15.87 yuan/share to issue 404 million shares to pay 636 million yuan in cash consideration, with a cash consideration of 373 million yuan; at the same time, it plans to raise $40 million in supporting capital for the non-public offering of 25.22 million shares to shareholders Zhou Jianlin and Huaxia Life. At the same time, Li Huaizhuang, Liu Jing, Lin Lixian, and Wang Kun of Wuxi online and offline promised to increase their holdings of the company by 60.55 million yuan and 40.32 million yuan respectively through the secondary market within 12 months of receiving the initial equity transfer, for a period of 6 months. Zhou Jianlin, the controlling shareholder of the company, added a share lock-up commitment. The 165 million shares he already held were locked for 12 months from the listing of shares newly subscribed for supporting financing. Core view: 1. The company has completely transformed the field of big data+mobile marketing. In recent years, it has built a relatively comprehensive big data mobile marketing map through “vertical and horizontal alliances, participation and control”, with the goal of establishing a world-leading precision marketing platform. The company has divested its original power surge business. After this acquisition is completed, it will form a “5 control and multiple parameters” layout, with 5 wholly-owned subsidiaries: Jinyuan Interactive, Weiying Interactive, Cloud Time and Space, Kid Technology, and Wuxi online and offline. 2. The digital marketing market continues to expand, and programmatic purchasing is receiving a lot of attention. In 2015, the overall market size of online advertising in China was 209.37 billion yuan, up 36.0% year on year. Among them, the mobile advertising market was 90.13 billion yuan, up 178.3% year on year, and the development momentum is strong. 3. This acquisition is conducive to further improving the company's digital marketing business chain, adding new business areas, facilitating the linkage of various business segments, and generating business collaboration among various subsidiaries. Prior to this acquisition, it already held 13.5% of the shares in Xiaozi Technology and 10% of the online and offline shares in Wuxi. Kid Technology: It has the ability to analyze detailed data and design and build programmatic mobile Internet advertising platforms. Its business scope includes various mainstream mobile advertising delivery models such as network affiliate promotion, boutique promotion, and programmatic marketing. Online and offline in Wuxi: A professional mobile information service provider that mainly uses its own enterprise ICT business platform to provide mobile SMS services for e-commerce and business activities of small and medium-sized enterprises, including verification codes, notifications, member reminders, etc. 4. Maintain a “buy” rating. The actual net profit for 2016 is forecast to be 208 million yuan, the EPS is 0.30 yuan, and the corresponding PE is 51 times higher. Considering the performance of online and offline promises of Xiaozi Technology and Wuxi, it is predicted that the net profit for exam preparation from 2016 to 2018 will be 293 million, 362 million, and 448 million yuan. Based on the total share capital of 703 million shares after the additional issuance is completed, the corresponding EPS for 16 to 18 is 0.42 yuan, 0.52 yuan, and 0.64 yuan. The current stock price of 15.03 yuan/share corresponding to the PE preparation for 16 to 18 years is 36 times, 29 times, and 24 times. The company's total market value after the additional distribution is completed is 10.6 billion yuan. 5. Risk warning: The development of the mobile marketing industry falls short of expectations, and the risk of mergers and acquisitions integration