Investment points: As the absolute leader in domestic anti-aircraft missiles, the company once again initiated major asset restructuring procedures after a lapse of five years, as a holding listing platform under the Second Academy of Science and Technology. The actual controller of the company is the Aerospace Science and Industry Group, and the controlling shareholder is the Second Academy of Science and Technology, the domestic monopolist responsible for developing anti-aircraft missiles. The company recently announced a restructuring plan. It plans to acquire a controlling interest in Parker Xinneng and Jingyi Planning by issuing shares and paying cash and raise supporting capital. Our analysis predicts that the company and the Second Institute are responding positively to the Group Headquarters's planning call to speed up the level of asset securitization and give full play to the advantages of listed platforms. The company focuses on developing the three main industries of security technology, medical devices, and electronic information. It is the core enterprise of the Group and the Second Hospital leading deep military and civilian integration and industrial transformation and upgrading. The company is forging ahead around the three main businesses. In 2016, the company achieved a year-on-year increase in operating income of 28.93% to 1,133 billion yuan, and net profit after deducting a year-on-year increase of 411.20% to 031 million yuan. With the gradual improvement of the industry-research linkage layout and marketing system, the company's core competitiveness is expected to continue to improve, and the momentum for a positive trend in operating indicators may only increase unabated. The two targets to be acquired in this plan are leaders in the high-end power supply and geographic information segments, respectively. The additional business may significantly increase the company's earnings per share and drive the valuation center downward. Parker Xinneng is a domestic high-end power supply manufacturer and integrated solution provider, and Jingyi Planning is a leading enterprise for overall geographic information solutions within the public security system of Guangdong Province. Our analysis predicts that this transaction is expected to complete equity settlement by the end of 2017, and that the original shareholders' equity dilution is very limited, which may significantly boost the profitability of listed companies. Under the group's trend of increasing support for the development of existing holding listed companies, the company is expected to become a holding listing platform for the integration of military assets in the Second Hospital. There is plenty of room for external performance growth and potential for target market value growth. The Second Academy of Science and Technology is the sole controlling shareholder of the company. In 2015, it achieved net assets of 20.395 billion yuan, total operating income of 30.031 billion yuan, and net profit of 2,812 billion yuan. Considering that the anti-aircraft missile industry has high barriers and high growth, asset consolidation space and valuation flexibility expectations are worth focusing on. The first coverage gives a buying rating. It is predicted that the company's EPS for 17/18/19 will be 0.22, 0.29, and 0.41 yuan/share, respectively, and the current stock price (19.34 yuan) corresponding to PE is 88, 67, and 47 times; assuming that the EPS prepared for this transaction is 0.28, 0.37, and 0.50 yuan/share, the corresponding PE preparation for the exam is 69, 52, and 38 times, respectively, and the average PE of comparable companies with similar business with Aerospace Changfeng during the same period is 55, 41, and 28 times. The company's current PE level is too high compared to the industry average. However, given that the company's current stock price (19.34 yuan) is 36% lower than the reserve price of the currently issued shares (26.30 yuan), there is a certain margin of safety, and at the same time, considering that the company is expected to consolidate assets in the second hospital in the future, it was given a buying rating for the first time. Risk warning: high valuation pressure on companies; performance risk of regular reporting; approval risk of this round of asset restructuring; decision risk of higher authorities, group companies, and the Second Academy of Science and Engineering; macroeconomic policy risks such as civil-military integration, mixed reform, and institutional restructuring.