The company's recent situation As of December 24, 2016, the Huangshan Scenic Area received more than 3.3 million visitors. Among them, the passenger flow is expected to exceed 200,000 in December, with a year-on-year growth rate exceeding 100%. The rapid increase in passenger traffic in December mainly benefited from the free ticket promotion for people in Anhui from December 14 to December 20. Over the past 7 days, Huangshan Scenic Area received 122,000 visitors, including 98,000 from Anhui. The rapid growth in commentator traffic guaranteed excellent performance in the fourth quarter in the short term, proving that there is still a lot of room for the number of visitors to Huangshan Scenic Area to increase in the long term. One of the major concerns of the market about Huangshan is that it has reached the bottleneck of reception, but in fact Huangshan still has a lot of room for growth in the number of visitors during the non-Golden Week period, especially during the off-season. The company can adopt more similar promotions in the future to drive revenue growth in the off-season. Passenger flow will continue to improve over the next two years: Judging from the data for the past 15 years, Huangshan has never experienced two consecutive years of decline in passenger flow. After deducting the number of free tickets in 2016 (G20's free ticket for Hangzhou people and the recent free ticket policy for people in Anhui), passenger flow declined by ~ 5% year on year. Passenger flow is likely to rebound from a low base in 2017. And the opening of the Hangzhou—Huang High Speed Rail in 2018 will bring qualitative changes to the development of scenic spots. Market-based reforms have increased profit margins: 1) The company has leased and operated mountain hotels, including Huangshan Hotel and Yungu Mountain Villa, which have lost money all year round, and Huangshan International Hotel has also successfully turned losses into profits. Yamashita Hotel's history has lost 30 to 40 million yuan a year, and it is expected to reduce losses by close to 10 million yuan this year. 2) Mountain Hotels carry out revenue management and develop in the direction of boutique hotels to increase profit margins while ensuring RevPAR growth. At the same time, more tourists are encouraged to stay under the mountain and increase the occupancy rate of Yamashita hotels. Moreover, the pricing for mountain hotels will change from being set at the beginning of each year to a more market-based and flexible pricing strategy, which can adjust prices in real time. 3) The company actively cooperates with market-based institutions and signed strategic cooperation agreements with various companies such as Xiangyuan Holdings, Hanyuan Capital, and Scenic Area Culture this year. 4) In the future, it is expected that a more flexible market-based incentive system will be adopted at the subsidiary level. The market value management momentum of the new management has increased markedly. Since the new management took office in 2016, the company's government and enterprise were separated for the first time (the new president did not also serve on the Huangshan Management Committee), and more attention was paid to using listed company platforms to achieve outreach expansion. Recently, the company has successively implemented two expansion projects in Taiping Lake and Hongcun, and its execution has increased significantly compared to the past. The epitaxial expansion project is expected to directly boost the company's performance (in 2015, the ticket revenue for the Hongcun Scenic Area alone reached 110 million yuan, with an opportunity to be held and consolidated in the first half of 2017), and also boosted the company's demand for refinancing. The valuation proposal maintains the recommended rating for Huangshan Tourism A/B shares. The target price for A shares is 20.49 yuan, and the target price for B shares is 1.96 dollars. The current price-earnings ratio for A Shares/B Shares in 2017 is 29/17 times. If the equity value of Huaan Securities is deducted, the corresponding price-earnings ratio is 25/14 times. Risk market-based reforms have fallen short of expectations, and natural disasters have affected travel.