Hongtao Co., Ltd. (002325.CH/RMB 6.63, no ratings) has entered the field of education since 2015 through extended mergers and acquisitions of cross-examination education and companies such as Schersen. Due to various uncontrollable negative effects, Xuersen did not meet expectations in 2015-2016. Currently, the company's education field continues to upgrade itself and is initially on the right track. It is expected that it will develop further in the future. The cross-examination education completed that year's gamble, showing a good development trend. Meanwhile, in the field of decoration, Youzhuang Meijia, a subsidiary of China Fashion Xinwang, which is controlled by the company, is gradually becoming the leading online decoration platform. Backed by the China Decoration Association, it has a certain advantage in terms of cost. In the context of China's consumption upgrade, it has gradually established an advantageous position in high-end home improvement, which has played a high-quality drainage role in the company's main business shift to home improvement. At the same time, benefiting from the increase in infrastructure investment, the company's main business has picked up. Currently, the revenue ratio of active orders has reached 1.1, providing a solid foundation for the company's performance recovery. In this context, the company's management increased its holdings in the second quarter of 2017, which shows the company's management's confidence in the future development of the company. Key points 1. The company's new orders are picking up, and the main business is picking up. The company signed a new order of 1.1 billion yuan in the first quarter of 2017, and currently has an order of 3.3 billion yuan, 1.1 times the revenue order ratio, laying a solid foundation for the company's performance in 2017. Of these, 90% were public equipment orders, indicating that the company's advantage in the public equipment field has been maintained. 2. Youzuo Meijia has developed rapidly and is mutually reinforcing with its main business. The company holds Zhongzuo Xinzhuang's offline Youzhuang Meijia and is currently the leader in home improvement e-commerce platforms. The platform relies on the China Fashion Association and interacts with the company's main business, leading the industry in cost control. With the further increase in per capita income, consumption upgrades have driven the expansion of demand in the high-end home improvement market, providing a high-quality drainage portal for the company to move from public clothing to home improvement in the future. 3. Xuelsen got out of trouble, and the new curriculum kept up with the times. The construction vocational training company Xuelsen failed to complete the performance gamble in 2016, achieving revenue of 105 million yuan and net profit of 45.5858 million yuan (promised profit of 40 million yuan). The main reason was that the country suspended a number of practice certification examinations for builders, registered safety agents, and registered supervisors, as a policy risk. The fundamentals of Xuelsen's dominant position in the field of training (diocese, teacher training) have not changed. In this environment, Xuelson responded positively and transitioned from “license education” to “ability education.” As the main labor force in China's construction industry ages (the average age of migrant workers in China reached 39 in 2016), the technical content of the construction industry has gradually increased, and a series of courses such as BIM training have been launched to lay ahead of the wave of technical training brought about by the influence of the labor force. 4. The gamble was completed across exams, and the expected performance was on the right track. In 2016, cross-examination education had revenue of 177 million yuan and net profit of 46.2752 million yuan (promised profit of 40 million yuan). The company launched a “mobile+live streaming” business model, using informatization to reshape the “central kitchen research and development+O2O teaching+KTS system management” business model, enhance the student experience, and gradually consolidate its leading position in the education market. 5. Equity incentives are combined with management to increase the company's stock holdings and increase confidence in enterprise development. The company completed the third phase of the equity incentive plan in March 2017. The company's 261 people (including the company's main management and technical personnel) participated in this plan. According to the equity incentive plan, the company is confident that revenue in 2017, 2018 and 2019 will increase by 12%, 24%, and 36% compared to 2016. At the same time, Mr. Liu Nianxin, the controlling shareholder of the company, and her spouse, Ms. Chen Yuanfen (co-actor), increased their holdings of the company by 9.729,96 million shares through competitive trading, at an average price of 6.45 yuan per share, demonstrating their confidence in the future development of the company. Risks suggest that the growth of the construction industry falls short of expectations, and that the development of the education industry falls short of expectations.