Key events in the report describe that Xunxing Co., Ltd. recently issued the “2016 Annual Results Forecast Revision Notice”. It is expected to achieve net profit of 10,79525 million yuan to 122.3461 million yuan in 2016, an increase of 50% to 70% over the previous year. Incident review The increase in sales revenue and product structure optimization in the fourth quarter led to a significant improvement in performance. Xunxing Co., Ltd. is the largest zipper manufacturer in China. It has a complete zipper production line. It currently has more than 7,000 sets of advanced equipment, a daily production capacity of 5 million pieces, and has been ranked first in the country for a long time. At the same time, the “SBS” brand is positioned as a high-end zipper product and enjoys a reputation in the industry, and is the number one zipper brand in China. The year-on-year growth rate of the company's sales revenue improved quarterly, and the fourth sales revenue growth rate is expected to reach 26%; the company actively promotes precise manufacturing, strictly controls production costs, adjusts and optimizes product and customer structures, and raises gross margin levels; in addition, the funding raised from non-public offerings in 2015 will also optimize the financial structure and save financial expenses; affected by the above factors, the net profit growth rate returned to mother was raised from 20%-50% to 50%-70% in 2016. The controlling shareholder agreed to transfer shares, and the company's business scope was further expanded. <公司章程>On November 11, 2016, Xunxing Group, the controlling shareholder, transferred 89.5 million shares of the company's shares to Huizefeng, accounting for 25% of the company's total share capital (the total price of the underlying shares was 2.5 billion yuan). Currently, the relevant shares have been transferred, and Wang Lijun, the actual controller of Huizefeng, became the actual controller of Xunxing Co., Ltd.; on January 20, 2017, the board of directors of Xunxing Co., Ltd. reviewed and passed the “Proposal on Increasing and Revising the Company's Business Scope”, which added “investment management, asset management consulting, and housing leasing” to the business scope. With the new actual controller taking over, the company's business scope is expected to expand further in addition to the main zipper business. Continue to monitor the progress of subsequent business integration. According to the “Notice Concerning Responses to the Shenzhen Stock Exchange Inquiry Letter” disclosed by the company on December 22, 2016, Huizefeng signed a “General Entrusted Loan Contract” with Qiyou Investment and the Tangshan Kaiping Branch of the Agricultural Bank on November 14. The 2.5 billion entrustment loan provided by Qiyou Investment to Huizefeng constituted the main source of acquisition capital. The acquisition price of 25% of the shares is 2.5 billion yuan, which is equivalent to an overall valuation of the company of 10 billion dollars. Considering the current total market value of less than 6 billion dollars, the subsequent share price has some room for improvement, and continues to monitor the progress of subsequent business integration and changes in business scope; considering only the company's original main business situation, earnings per share in 2016-2017 are expected to be 0.31 yuan and 0.35 yuan, corresponding to the current valuation of 52 and 46 times, maintaining the “buy” rating. Risk warning: 1. Risk of actual controller change and subsequent business integration