Key investment points: Guochuang Hi-Tech to acquire Shenzhen Yunfang for 3.8 billion yuan. Since its establishment in March 2002, Guochuang Hi-Tech has mainly focused on modified asphalt engineering and road maintenance. The January 2017 announcement was to acquire Shenzhen Yunfang at a price of 3.8 billion yuan by issuing shares and paying cash. Among them, the company plans to issue 257 million shares at a price of 853 yuan per share, pay 2,192.6 billion yuan to shareholders of Shenzhen Yunfang, and complete the remaining 1,607.4 billion yuan in cash payments. The transaction plans to raise 2,097 billion yuan and 450 million yuan to expand the Shenzhen Yunfang network platform. In this transaction plan, the company plans to raise supporting funds in a price-locked manner from Guochuang Group, Huxing Minghua, Five Ye Shen Investment, Donghu No. 16 Asset Management Plan, Shenzhen Inheritance and Mutual Development, Win-Win No. 3 Asset Management Plan, Easy Simple, Win-win No. 2, and Gao Panwen. The issue price is 8.08 yuan per share, and the capital raised is no more than 2,097 billion yuan. Of this, about 1.6 billion yuan will be used to acquire the cash payment portion, and the remaining 450 million yuan will be used to invest in marketing network construction and big data operation platforms, further strengthen the company's independently developed network platforms, and enhance the company's competitiveness in the industry. The performance promise is to deduct non-return net profit of 1,187.5 billion yuan in 2016-2019. According to the performance commitment agreement, Shenzhen Datian, Lhasa Yunfang, Happy Tongfu, and Guochuang Group, and Shenzhen Yunfang, the target companies of Shenzhen Yunfang, and Guochuang Group, deducted no less than 242.5 million yuan, 257.5 million yuan, 322.5 million yuan, and 365 million yuan, respectively, of no less than 242.5 million yuan, 257.5 million yuan, 322.5 million yuan and 365 million yuan respectively, for a total of 1,187.5 million yuan. Using the total share capital after considering issuing shares to acquire companies and issuing shares to raise supporting capital, the EPS corresponding to the 2017-2019 commitment can reach 0.27, 0.34, and 0.38 yuan per share. After the acquisition was completed, the company's main business was modified asphalt and real estate. If this transaction goes smoothly, Guochuang Hi-Tech will become the dual main business of modified asphalt and real estate. Since the operating income of modified asphalt has declined a lot in recent years, and the business scale of Shenzhen Yunfang continues to increase, we expect Guochuang Hi-Tech to generate more than 80% of its revenue from Shenzhen Yunfang after the acquisition is completed. The acquisition of Shenzhen Yunfang Network incorporated new growth points into Guochuang's high-tech business and improved the company's overall profit situation. According to data provided in the transaction plan, Guochuang Hi-Tech's total assets increased from 1.7 billion yuan to 6.88 billion yuan, an increase of about 3 times; the debt ratio fell from 46.4% to 25.3%, a decrease of about 21 percentage points; and gross margin and net profit margin increased from 1.79% and 0.33% to 7.22% and 5.17%, respectively. Investment advice: No ratings yet. The current acquisition of Shenzhen Yunfang by Guochuang Hi-Tech at a price of 3.8 billion yuan provided sufficient capital for the latter's rapid expansion, which is beneficial to Q Housing Network's expansion market share and medium- to long-term development. Comparable to the price-earnings ratio of listed real estate intermediary service agencies (365 Network and World Federation Bank) PE valuations in 2016 and 2017 were 27 times and 21 times or more. The dynamic valuation of the first phase of scale expansion of real estate intermediary services in Haitong's intermediary valuation model is around 10-15 times. We believe that if the acquisition is successful, Guochuang Hi-Tech can be valued at least 25 times. We forecast the company's 2017 EPS to be 0.27 yuan per share. As there is still uncertainty about the success of the deal, we are currently not rating the company. Risk warning: Takeover transaction risks.