Key investment points: Deep cultivation+expansion model, focusing on the Yangtze River Delta and Pearl River Delta. In recent years, Shenzhen Yunfang has continued to develop under the model of deep cultivation+expansion. Future expansion will focus on the Pearl River Delta and Yangtze River Delta. Of the 1,073 offline stores currently owned by the company, 369 are located in Shenzhen, and nearly 57% of the stores are in the Pearl River Delta; 192 are in Shanghai, and nearly 35% are in the Yangtze River Delta region. The company plans to focus on first-tier cities, focus on potential second- and third-tier cities, continue to cultivate advantageous locations, and increase local market share. Of the capital raised in Guochuang Hi-Tech's transaction plan to acquire Shenzhen Yunfang Technology, 450 million yuan will be used to expand online and offline business in Guangzhou and Shanghai, filling the regional gap. Early expansion lays the groundwork for later growth rates. Shenzhen Yunfang was in a period of expansion during 2014-2015, establishing more than 800 new stores. As of the end of August 2016, the company had 1,073 stores in 12 cities. While the growth rate of stores clearly slowed in 2016, the profits of stores that were expanded in the previous period increased, and the profit for the first 8 months of 2016 turned a loss into a profit. Considering that maintenance costs for data platform construction and store construction are gradually reduced in later operations, there is room for the company to release future profits. Performance commitments have taken into account the impact of market regulation. The performance commitments signed by the two parties in this transaction have taken into account the impact of market regulation. Shenzhen Yunfang promised that the net profit of non-returning ordinary shareholders in 2016-2019 will not be less than 242.5 million yuan, 257.5 million yuan, 322.5 million yuan, and 365 million yuan, respectively. Corresponding to the 2017-2019 commitments, EPS will reach 0.27, 0.34, and 0.38 yuan per share. The stock housing market has considerable potential. Housing in first-tier cities started early and developed rapidly, and the total volume was large; the volume of second-hand housing transactions has already surpassed that of new housing transactions and entered the era of stock housing. Some hot second-tier cities, such as Nanjing, have also seen a phenomenon where the ratio of second-hand housing to new housing transactions exceeds 1. With the gradual advancement of urbanization and the reduction of land available for construction in cities, there is considerable potential for the housing stock market in the city center. Earnings forecasts and ratings. According to the “three-stage” model for intermediary bank valuation proposed by Haitong Real Estate Group, the dynamic PE valuation multiplier for the first stage agency business is recommended to be between 10-15 times. From 2014 to 2015, Shenzhen Yunfang was in a stage of rapid improvement in agency business. In 2016, the expansion rate slowed down, operating efficiency improved, and performance initially reflected the effects of earlier expansion. The company expects to continue to expand online and offline service business in the Yangtze River Delta region after completing this acquisition transaction, which is still a period of rapid growth. Comparable companies, the PE of the World Federation Bank and 365 Network in 2017 was about 22 times higher. We believe that if the acquisition is successful, Shenzhen Yunfang will obtain sufficient capital through this transaction to continue to deepen its advantageous position, expand its market share, and be valued at least 25 times. According to the performance commitments signed in the deal, EPS in 2017 could reach at least $0.27 per share. As there is still uncertainty about the success of the deal, we are currently not rating the company. Uncertainties. Takeover approval risks.