Dianping will hold about 9.9% of Baotou Agricultural Commercial Bank's shares. Before this capital increase, the total share capital of Baotou Agricultural Commercial Bank was 500.19 million shares. The proposed capital increase was no more than 50,000 shares. The stock price of the capital increase was 2.2 yuan per share. Refer to its net assets of 1.85 yuan per share on September 30, 2016, with a premium of 18.92%. The premium level is lower than the PB level of small capitalization banks that have just recently been listed in the secondary market. We expect the company will hold about 9.9% of the shares after the capital increase is completed. Increase technology finance. After this capital increase, Baotou Agricultural Commercial Bank will work to join forces with technology companies to create online credit and internet finance services to achieve efficient services throughout the process of information collection, inquiry, credit reporting, due diligence, approval, and credit granting. Through this capital increase, the company has become an important strategic investor of Baotou Agricultural Commercial Bank. It will cooperate closely with Baotou Agricultural Commercial Bank in business and technology to help Baotou Agricultural Commercial Bank transform in the direction of technology finance, and at the same time fully expand the company's business layout from data center back-end guarantee to front-end business. The majority shareholder plans to fully subscribe for the company's first major capital operation after the non-public offering, which is of great significance. According to the non-public offering plan previously announced by the company, the company plans to privately issue no more than 30,837,004 shares to the actual controller Zhan Lixiong and his spouse Zheng Dan. The total amount of capital to be raised is no more than 560 million yuan, and the issue price is 18.16 yuan/share. Assuming that the issuance is successfully completed, Zhan Lixiong's shareholding ratio is 30.13%, and Zheng Dan's shareholding ratio is 2.48%. The total shareholding ratio will increase to 32.60%, triggering the conditions for the tender offer. The current subscription for shares in Baotou Agricultural Commercial Bank is the first major capital operation since the company issued shares privately, and is also the largest capital operation since the company went public. We have emphasized many times that after the majority shareholders subscribe in full, they need to pay attention to subsequent capital expansion, and Baotou Agricultural Commercial Bank once again verifies our judgment with this capital increase. Investment proposal: The majority shareholders covered 18.16 yuan and were fully confident; they took a stake in Baotou Agricultural Commercial Bank, and the two sides cooperated to increase technology finance, and further accelerate capital operations. Without considering supporting financing, the diluted share capital is expected to be 0.38 yuan and 0.54 yuan respectively in 2016-2017, maintaining a “buy-A” rating, with a target price of 28 yuan for 6 months. Risk warning: Risk of declining gross margin, risk of new business expansion falling short of expectations.