The company announced that it plans to acquire 80% of Huatong Cloud Data's shares. The transaction price was initially determined to be 1.8 billion yuan, of which the cash consideration was 72,82365 million yuan and the share consideration was 1071.7635 million yuan (issue price is 1,296 yuan/share). At the same time, it is proposed that the total amount of supporting capital raised to Guanhe Investment will not exceed 750 million yuan to pay the cash consideration for the transaction and the expenses of various intermediaries. The issue price will not be less than 15.29 yuan/share, and the lockdown period will be three years. After the above transaction is completed, the company will directly hold 100% of Huatong Cloud Data's shares. Trading of the company's shares resumed on January 7. Huatong Cloud Data is a technology-leading integrated cloud computing service provider in China. Based on IDC hosting services, the company is vigorously expanding the business system of upgraded services such as Internet resource acceleration services and cloud computing services. Benefiting from the rapid growth in IDC market demand and the popularity of government clouds, the company has maintained rapid growth in recent years. IDC hosting services have carried out business cooperation with Ali, Tmall, Baidu, Tencent, etc.; in addition, it also provides related services to government departments such as the Zhejiang Provincial Government and the Hangzhou Municipal Government. After the transaction is completed, Huatong Cloud Data will also provide back-office support and guarantee for the big data storage, analysis, operation, maintenance and management capabilities of listed companies. Further consolidate performance and focus on the future. Huatongyun promised to deduct non-net profit of no less than 158 million yuan, 197.5 million yuan, and 246.875 million yuan in 2017, 2018, and 2019, respectively. After the acquisition is completed, the company's performance will be further consolidated, and this acquisition is also in line with the company's established strategic philosophy: complete the optimization of the business structure as soon as possible through disposal of inefficient assets, injection of high-quality assets, etc., laying a good foundation for gathering resources to focus on major transportation, big finance, big health, etc., and the forward-looking layout of artificial intelligence. Part of Kuiwei Technology's shares has been transferred, and the restructuring of the business is nearing its end. During the suspension period, the company announced that it plans to transfer 76% of the shares of its subsidiary Kuaiwei Technology for 133.7 million yuan, which is expected to generate 50122,800 million yuan in equity transfer income. We believe that with the divestment of Kuiwei Technology, the company's business restructuring is nearing its end, and the 2016 annual report is expected to achieve a good harvest. Sword refers to leading companies in the AI 2.0 era. While speeding up the completion of the transformation of traditional business, the company put forward the goal of building a leading enterprise in the AI 2.0 era in a timely manner, quickly deployed in terms of capital and industry, and demonstrated strong execution. 1) Capital level: Set up an industrial fund with top domestic enterprise groups such as TCL and Yintai; at the same time, the majority shareholder group level signed a strategic cooperation agreement with Cyberle to set up an industry incubation fund to serve the construction of the “Zijin Public Innovation Town”; 2) Industrial level: Strongly join forces with Zhejiang University to gather the school's strongest research strength to build a joint AI research institute; based on the opportunity of double innovation, joint investment and construction of an AI industry base with Zhejiang University. After a series of combo punches, the company's AI strategy and execution path have gradually become clear. Investment suggestion: After the acquisition of Huatongyun and the divestment of Kuaiwei Technology are completed, the company's business restructuring will come to an end, and its performance will be further consolidated, eliminating the worries of transformation, and laying a good foundation for the subsequent development of artificial intelligence. Considering the performance contribution brought by the sale of Zhonghe Technology and the transfer of Kuiwei Technology this year, the company's net profit for exam preparation in 2016 and 2017 is estimated to be 300 million yuan and 350 million yuan, maintaining a buy-A rating, with a target price of 23 yuan for 6 months. Risk warning: The transformation of artificial intelligence is falling short of expectations.