Key investment points: Food cold chain and book distribution companies under the Trade Group have continued to consolidate their main business after going public, expanding the scale of asset income, and highlighting the advantages of resources and channels within the province. Guanghong Holdings is a platform for listed companies of Guangdong Trade Holdings. According to the company's performance report for the first three quarters, we expect revenue to be close to 2 billion dollars in 2016, with total assets of about 1.56 billion yuan. The company is one of the largest frozen meat suppliers in Guangdong Province, and undertakes a large share of the task of storing frozen pork from the provincial and municipal governments; Guangdong Education Bookstores are mainly responsible for the distribution of textbooks approved by the Provincial Department of Education and the market variety of teaching aids. The distribution scale of textbooks for primary and secondary schools in the province is second only to Southern Media. Overall, the competitive pattern of the main industry is stable, and the coverage advantages of upstream and downstream resources and channel outlets are obvious. It has good genes in the education industry and the meat cold chain industry. It is hoped that strategic upgrading will seize the rapid development opportunities of the education industry and the cold chain industry during the growth period. Optimizing the equity structure first may continue to benefit from the spring trend of state-owned enterprise reform in the province. In 2015, the controlling shareholder completed mixed reform and successfully introduced private capital. The new chairman of the company, Mr. Cai Biao, took office. It is expected to bring an increase in system, ideas, and resources to the company, and put forward new requirements and challenges for growing bigger and stronger. Mr. Cai Biao has been with the Trading Group for about 15 years. We speculate that we can maintain a good cooperative relationship with the Group. In 2016, core management participated in the shareholding plan and purchased more than 6.29 million shares of the company at an average price of 9.058 yuan/share, for an amount of about 56 million yuan, to bind the interests of management and the company. At the same time, the reform goals of state-owned enterprises in Guangdong Province are clear. By 2020, the securitized assets of state-owned enterprises in the province will reach nearly 1 trillion yuan, and the asset securitization rate outside of some industries will reach 70%. The time for national reform is just right. Guangdong Commerce and Trade is a key state-owned enterprise belonging to the province, and may become an important force in the reform of state-owned enterprises in the province. As the Group's current only listed company platform, Guanghong Holdings may have some opportunities for extended mergers and acquisitions and high-quality asset injections. Financial data is solid, and there is plenty of ammunition for strategic upgrades. As of the 2016 quarterly report, the company had cash on books of 400 million yuan, bank wealth management of 400 million yuan, and total assets of 1.58 billion yuan. Although the book value of fixed assets is low, all of the company's plots on Shuichang Road in Liwan District of Guangzhou and the Guanwei plot in Tanzhou Town, Zhongshan are relatively good. The surrounding residential areas have already reached scale. We expect that the actual value of the company's land use rights may be higher than the book value, and there is a possibility that the actual value of the company's land use rights may be higher than the book value, and there is a possibility of a change in planned use and revaluation. The company's two key projects are progressing in an orderly manner. It is expected that the mature operation of the Guangdong trade network and the commissioning of the headquarters economic building under construction will contribute to the company's performance to a certain extent, while also having a positive effect on the company's operating model and financial structure, respectively. Overall, the company's performance is steadily improving, capital and asset accumulation is abundant, and there is strong backing for future transformation and upgrading. Profit forecast and valuation: We forecast the company's net profit for 2016 and 2017 to be 101 million yuan and 116 million yuan respectively, corresponding to EPS of 0.17 yuan and 0.20 yuan, respectively. Based on (1) the company's recent institutional reform catalytic, historical opportunities for state-owned enterprise reform, better textbook distribution industry, cold chain industry resource channel accumulation, and better financial data and asset conditions, they should enjoy a certain premium; (2) the valuation level of listed companies in the combined contract industry, the profit contribution of the company's two main businesses, covered for the first time, was initially 65 times PE in 2017, corresponding to the target price of 13.0 yuan/share, buying rating. Risk warning: Provincial state-owned enterprise reform process, extension development falls short of expectations; cold chain, distribution industry risks, etc.