Incident: 1) The company held a press conference on the acquisition of Grid Dynamics (GD for short) on May 24. Executives from both sides attended and explained the international development strategy; 2) The company issued an announcement. Wang Weihang, the largest shareholder, plans to gradually increase the company's shares within 12 months, with an increase of 300 to 600 million yuan. The acquisition of GD helps “upgrade” domestic and overseas businesses. Established in 2006 and headquartered in the US, GD provides customers in the retail, financial, media and technology industries with omni-channel electronic platform core system distribution, cloud delivery, and real-time big data analysis services based on open source technology. The company's traditional information technology business usually relies on domestic channel resources. GD is technologically advanced on a global scale, which is expected to upgrade the company's business: 1) high-quality customer resources, GD customers cover the top retailers and technology industry giants in the US; 2) Strong technical strength, GD can help customers replace products from the world's top manufacturers such as Oracle and IBM through open source technology; 3) It has rich talent reserves. GD has a large number of senior talents from Eastern Europe through unique incentives. The synergy effect is prominent, and endogenous epitaxial motivation is expected to increase. The company's original domestic business covered government, telecommunications, financial and other customers, emphasized autonomous and controllable capabilities, and expanded the Southeast Asian and American markets through Hong Kong. The company's acquisition of GD through ASL, a Hong Kong listed subsidiary that indirectly holds 65% of the shares, will significantly increase performance; on the other hand, it will highlight the company's advantage of having dual listing platforms in mainland China and Hong Kong. This successful acquisition lays the foundation for further expansion in the future. On the basis of domestic independent and controlled businesses, overseas business is expected to become a new growth point. Chairman Wang Weihang plans to increase his shareholding, demonstrating confidence in the company's future development. We believe that the company's chairman's plan to increase holdings will effectively reduce uncertainty from the integration of various subsidiaries within the company and dispel the core factors of market concerns. The company's management has strong execution and is active in the Internet of Things, cloud computing, big data, etc. With the gradual improvement of the industry and regional layout, the synergy between various businesses is expected to be fully exploited. Investment advice: As a leading comprehensive information service provider in China, the company has a series of advantages in cutting-edge technology, autonomy and control, and internationalization. We are optimistic about the expansion of the company's new business. The company's net profit growth rate in 2017-2019 is expected to be 271%, 20% and 14%, respectively, and EPS is 0.12, 0.14 and 0.16 yuan, respectively. The first coverage gives a “buy” rating. Risk warning: New business expansion falls short of expectations.