Guide to this report: The company completed the 95.01% equity acquisition of Huachuang Securities in 2016. Under the “fund+mechanism” guarantee, Huachuang's future performance can be expected to grow at a high rate. At the same time, the company's building materials business and participating real estate companies are expected to benefit from the construction of Xiong'an New Area. Investment points: maintain the “increase in holdings” rating, with a target price of 22 yuan/share. In 2016, the company achieved total operating income of 1,115 billion yuan (+220% year-on-year) and net profit of 142 million yuan. The year-on-year change from profit to loss was in line with our expectations. During the reporting period, the company completed the issuance of shares to acquire 95.01% of Huachuang Securities's shares and a supporting fund-raising of 7.36 billion yuan. The large fluctuations in the bond market at the end of 2016 caused Huachuang to lose net profit during the reporting period (September-December). The company has completed major asset restructuring and ancillary fundraising, so the 2017-19 EPS was adjusted to 0.48/0.76/0.90 yuan (17-18 EPS 0.54/0.55 yuan before the adjustment) to maintain the company's target price of 22 yuan/share, corresponding to 46XP/E in '17, corresponding to Huacheng Securities's 3XP/B in '17, and increased its holdings. The revenue structure of Huachuang continues to be optimized, “capital plus mechanism” guarantee, and high performance growth can be expected. (1) In 2016, Huacheng Securities achieved net profit of 408 million yuan, a year-on-year decrease of 41%, ROE 11.3% (regardless of the impact of supporting fund-raising), and performance performance superior to the industry average; (2) The company's revenue structure continued to be optimized. According to 16Q1 data, retail commission revenue accounted for less than 30%, and the advantages of the research business and the non-standard asset business built by the “Internet+Regional Stock Exchange Center” were outstanding. (3) Huachuang's core employees hold nearly 5% of Huacheng Securities's shares (before supporting fundraising is diluted), and the incentive mechanism is industry-leading. The company's 7.36 billion yuan supporting capital raising was put in place by the end of 2016, which will greatly promote the development of the company's capital-heavy business. The building materials business and participating real estate companies are expected to benefit from the construction of Xiong'an New Area. (1) The company's building materials business is mainly the production and sale of pipe profiles. The products have the “Baoshuo” brand famous trademark in China, which is widely used in urban water conservancy, municipal and housing construction projects, and has a high market share in the Hebei region; (2) The company has a 40% share in Baoshuo Real Estate. As of the end of May 2015, Baoshuo Real Estate and its subsidiaries own 276,000 square meters of residential land in the High-tech Zone of Baoding City, Hebei Province. Currently, it is still in the early stages of project development (13 years of bidding). Benefiting from the construction of Xiong'an New Area, the company's real estate reserves have a lot of room for appreciation. Core risk: The performance growth of Huacheng Securities fell short of expectations.