The strategic integration has begun to bear fruit, and the company's performance is growing rapidly: the company expects to achieve net profit of 1.99 to 210 million yuan in 2016, an increase of 429.04% to 458.28% over the previous year, slightly lower than our previous forecast of 229 million yuan. The company's performance achieved high growth mainly due to the following four points: 1) The company's strategic integration showed initial results, actively expanded and optimized component product lines and customers, and strengthened the layout of customers in industries such as smart chips, new energy vehicles, security, and intelligent rail transit. It has absorbed many high-quality brands in the horizontal integration of the industrial chain, improved the overall layout of the component product line, and enhanced the depth of technical support and cooperation with industry customers, thus enhancing the company's own industry leadership position and stable profitability. 2) The company's share transfer in the first quarter brought revenue. 3) The company is strengthening its external resource integration efforts, and internally strengthening internal management such as cost control, order management, and organizational optimization. 4) The company has set up a special investment department and industrial merger and acquisition fund to proactively adopt an innovative cooperative merger and acquisition model. At the same time as horizontal integration, it is also trying to extend upstream in the industrial chain to increase the driving force for upstream development through existing channel resources and customer resources. The plan to repurchase the company's shares shows long-term value: in response to the continuous decline in the company's shares, based on management's recognition of the company's future prospects and value, and in order to improve the profitability of the company's assets and protect investors' interests, the company decided to repurchase no more than 400 million yuan of shares at a price of no more than 10.32 yuan/share. If fully repurchased, it is expected to account for 3.62% of the total share capital. Prior to that, the company announced the completion of the employee stock ownership plan on June 20, 2016, and purchased 20.81 million shares through the secondary market, accounting for 1.945% of the company's share capital. The average purchase price was 10.065 yuan, for a total purchase of 209 million yuan. The company has successively carried out employee stock ownership and share repurchases in this price range, demonstrating the company's confidence in future development and highlighting long-term value. Acquisition of 48.45% of Allied Chuangtai's shares and distribution of MTK and Hynix chips: The company plans to acquire 48.45% of Allied Chuangtai's shares for HK$48.45 million. United Chuangtai is an authorized distributor of electronic component products with rich agency distribution experience. It is currently the supplier of MTK, the world's second-largest main control chip brand, and SK Hynix, the world's second-largest memory device. United Chuangtai is currently the only manufacturer in the domestic electronic component distribution industry that also owns MTK's main control chip, SK Hynix, and internationally renowned memory brands. The strong distribution rights for resource-based product lines have determined Co-Chuangtai's position and advantages in the industry. Through the acquisition of Joint Chuangtai, the company's electronic distribution industry can receive strong supplier support, thereby integrating and improving the company's electronic distribution product line and improving market competitiveness and overall profitability. On the one hand, the acquisition of Co-Chuangtai will enable the company to provide a package of product accessories to large and medium-sized customers, increasing the company's competitiveness among large and medium-sized customers. On the other hand, through sales in the company's Usoft Mall, it can attract more small and medium-sized customers, which will help expand the registered users of the company's Usoft Mall and increase the stickiness of the platform. Investment Strategy: Yingtang Intelligent Control's transformation distributor saw initial results. The results achieved high growth in 2016. The acquisition of 48.45% of Joint Chuangtai's shares will strengthen MTK and Hynix chip distribution, and future performance is expected to continue to grow. At the same time, the company actively promoted the repurchase of 400 million yuan of shares, demonstrating the company's confidence. We expect the company's revenue in 2016-2018 to be 56.86/77.76/8.258 billion yuan, and net profit to mother will be 2.05/2.47/255 million yuan respectively, and the corresponding EPS will be 0.19/0.23/0.24 yuan, respectively. The corresponding PE will be 52/43/42 times, maintaining the “recommended” rating. Risk warning: M&A integration falls short of expectations; industry competition intensifies; agency authority risk.