Incident: On January 19, 2017, the company issued the “Notice on Non-public Stock Issuance Applications Approved by the Issuance Review Committee of the China Securities Regulatory Commission”. According to the announcement, the company's application for non-public offering of shares has been reviewed and approved by the Development and Review Committee of the Securities Regulatory Commission. Key investment points: The fixed increase passed smoothly, and related risks were basically released. On December 30, 2016, the company revised the fixed increase plan based on feedback from the Securities Regulatory Commission, reducing the upper limit of the number of non-public shares issued and the maximum amount of capital raised to 298 million shares and 1,979 million yuan respectively. From January 11 to January 16, 2017, the company's stock price fell by more than 6.96 percentage points compared to the Shenzhen Stock Index. We believe that the main reason for this phenomenon is that the market is generally concerned about the risk that the company's fixed increase administrative approval will not pass. Currently, with the smooth completion of the company's fixed growth plan, the relevant risks have basically been released, and we continue to be optimistic about the company's future market performance. The acquisition of AVMax is expected to increase performance by 230 million yuan a year. The capital raised by the company's current fixed increase will be fully used to acquire 100% of the shares of Air Canada AvMax. According to the announcement, Avmax's net profit for Avmax from September 2015 to June 2016 was 210 million yuan, while the net profit for the entire fiscal year 2015 (the Canadian fiscal year was from September 1 of the previous year to August 31 of this year) was 173 million yuan, and its performance grew rapidly. Furthermore, AVMax has high-quality assets of more than 120 aircraft and is extremely capable of monetization. According to performance versus gambling conditions, the 2016 performance limit is 230 million yuan in net profit. The original shareholders of AVMax have the motivation and ability to achieve this goal. We expect the company's acquisition of AvMax to significantly increase performance. The development of the aircraft passenger to cargo business has begun. Currently, the stock of used freighters in the domestic market is extremely small. As China's cargo aviation boom rises and capital expenses increase due to the intensive listing of express delivery companies, the customer-to-goods market will usher in a blowout period. As of October 10, 2016, the company has completed a total of 60% of AvMax's equity acquisitions. The latter has mature experience in international maintenance, operation and service of regional aircraft, and has first-class engineering and technical capabilities and excellent qualifications, so it has a good brand reputation and credibility. Currently, Avmax has overhaul and modification qualifications for mainstream regional aircraft issued by the FAA and EASA, and can enter the domestic aircraft passenger conversion market relatively quickly in the future. We are optimistic about the company's future development in the aircraft passenger conversion market, and the company is expected to become a strong competitor in the domestic airline passenger conversion market. Maintain a “buy” rating. Considering that the company has not yet received written approval documents from the China Securities Regulatory Commission, based on prudential principles, we have divided our profit forecasts into two situations: (1) without considering the acquisition of AvMax, the company's net profit for 2016-18 is expected to be 0.80, 2.13, and 251 million yuan respectively; (2) under the premise of considering the gradual acquisition of AvMax, the company's net profit in 2016-18 is expected to be 1.07, 3.97, and 490 million yuan respectively. The corresponding EPS is 0.10, 0.38, and 0.46 yuan per share, respectively. The closing price on January 18, 2017 was calculated at 7.90 yuan, and the corresponding PE was 81, 21, and 17 times, respectively. Furthermore, the majority shareholders increased their shareholding ratio by 4.98% at a cost of 9.6 yuan/share, and the transaction amount was 361 million yuan, fully demonstrating their confidence in the company's future development prospects and recognition of the company's value, which has a stabilizer effect. At the same time, considering that US dollar assets have the function of preserving value and adding value in the context of the future depreciation of the RMB, AVMax will bring exchange benefits to Shanhe Intelligence and maintain a “buy” rating. Risk warning: Construction machinery performance continues to fall sharply below expectations; non-operating income falls short of expectations; general aviation industry-related policies are progressing less than expected; AVMax's business performance has declined sharply; and the acquisition process is uncertain.