Matters: Recently, the company issued a number of announcements. 1) The company expects to achieve profit of 1.99 to 210 million yuan in 2016, an increase of 429.04% to 458.28% over the previous year; 2) the company plans to repurchase no more than 400 million yuan of shares at a price of no more than 10.32 yuan/share. If fully repurchased, it is expected to account for 3.62% of the total share capital; 3) the company plans to acquire 48.45% of Liantech's shares at HK$48.45 million. Ping An's view: The strategic integration is beginning to bear fruit, and the company's performance is growing rapidly: the company expects net profit of 199 to 210 million yuan in 2016, an increase of 429.04% to 458.28% over the previous year, slightly lower than our previous forecast of 229 million yuan. The company's performance has achieved high growth mainly due to the following four points: 1) The company's strategic integration has seen initial results, actively expanded and optimized component product lines and customers, and strengthened the layout of customers in industries such as smart chips, new energy vehicles, security, and intelligent rail transit. It has absorbed many high-quality brands in the horizontal integration of the industrial chain, improved the comprehensive layout of component product lines, and enhanced the depth of technical support and cooperation with industry customers, thus enhancing the company's own industry leadership position and stable profitability. 2) The company's equity transfer in the first quarter brought profit. 3) The company has strengthened its external resource integration efforts and strengthened internal management such as cost control, order management, and organizational optimization internally. 4) The company set up a special investment department and an industrial merger and acquisition fund to proactively adopt innovative cooperative mergers and acquisitions models. At the same time as horizontal integration, it is also trying to expand upstream in the industrial chain to increase the impetus for upstream development through existing channel resources and customer resources. The long-term value of the proposed repurchase of the company's shares is evident: In response to the continuous decline in the company's shares, based on management's recognition of the company's future prospects and company value, and in order to improve the profitability of the company's assets and protect the interests of investors, the company decided to repurchase no more than 400 million yuan of shares at a price of no more than 1,032 yuan/share. A full repurchase is expected to account for 3.62% of the total share capital. Prior to that, on June 20, 2016, the company announced the completion of the employee stock ownership plan, and purchased 20.81 million shares through the issue-level market, accounting for 1.945% of the company's share capital. The average purchase price was 1,065 yuan, with a total purchase amount of 209 million yuan. The company has successively carried out employee shareholding and share repurchases in this price range, demonstrating the company's confidence in future development and highlighting long-term value. Acquire 48.45% of Liantech's shares to distribute MTK and Hynix chips: The company plans to acquire 48.45% of Liantech's shares for HK$48.45 million. United Chuangtai is an authorized distributor of electronic component products with rich agency distribution experience. Currently, it is a supplier of MTK, the world's second largest main control chip brand, and SK Hynix, the world's second largest memory. United Chuangtai is currently the only manufacturer that also owns MTK's main control chip, SK Hynix, and internationally famous memory brands in the domestic electronic component distribution industry. Strong distribution rights for resource product lines have determined the position and advantages of Joint Chuangtai in the industry. Through the acquisition of Joint Chuangtai, the company's electronic distribution industry can receive strong supplier support, thereby integrating and improving the company's electronic distribution product line and improving market competitiveness and overall profitability. On the one hand, this acquisition of Joint Chuangtai enables the company to provide a package of product accessories to large and medium-sized customers, increasing the company's competitiveness among large and medium-sized customers. On the other hand, it can attract more small and medium-sized customers through the company's Usoft Mall sales, which will help expand the registered users of the company's Usoft Mall and increase the stickiness of the platform. Investment Strategy: Yingtang Intelligent Control's transformation of distributors is beginning to see results. Achieved high performance growth in 2016. The acquisition of 48.45% of Liantech's shares will strengthen MTK and Hynix chip distribution, and future performance is expected to continue to grow. At the same time, the company actively promoted the repurchase of 400 million yuan of shares, demonstrating the company's confidence. We expect the company's operating income for 2016-2018 to be 56.86/77.76/8.258 billion yuan, net profit of 2.05/2.47/255 million yuan respectively, corresponding EPS of 0.19/0.23/0.24 yuan, and corresponding PE of 52/43/42 times, maintaining the “recommended” rating. Risk warning: M&A integration falls short of expectations; industry competition intensifies; agency authority risk.