The company announced that it intends to acquire 80% of Huatong Cloud Data's shares. The transaction price was initially determined at 1.8 billion yuan, of which the cash consideration was 728.2365 million yuan and the share consideration was 1071.7635 million yuan (issue price was 1296 yuan/share). At the same time, it is planned to raise no more than 75,000 million yuan of supporting capital from Guanhe Investment to pay the cash consideration for the transaction and the fees of various intermediaries. The issuance price is not less than 15.29 yuan/share, and the lockdown period is three years. After the above transaction is completed, the company will directly hold 100% of Huatong Cloud Data's shares. Trading of the company's shares resumed on January 7. Huatong Cloud Data is a technology-leading comprehensive cloud computing service provider in China. Based on IDC hosting services, the company vigorously expands the business system of upgraded services such as Internet resource acceleration services and cloud computing services. Benefiting from the rapid growth in IDC market demand and the popularity of government clouds, the company has maintained rapid growth in recent years. IDC hosting services have carried out business cooperation with Ali, Tmall, Baidu, Tencent, etc.; in addition, it also provides related services to government departments such as the Zhejiang Provincial Government and the Hangzhou Municipal Government. After the transaction is completed, Huatong Cloud Data will also provide back-office support and guarantee for the listed companies' big data storage, analysis, operation, maintenance and management capabilities. Further consolidate performance and recharge for the future. Huatong Cloud promised to deduct non-net profit of not less than 158 million yuan, 19.75 million yuan, and 246.75 million yuan in 2017, 2018, and 2019, respectively. After the acquisition is completed, the company's performance will be further consolidated. The acquisition is also in line with the company's established strategic idea: complete the optimization of the business structure as soon as possible by disposing of inefficient assets and injecting high-quality assets, laying a good foundation for gathering resources to focus on overcoming major transportation, big finance, big health, etc., and the forward-looking layout of artificial intelligence. Part of Kuaiwei Technology's shares were transferred, and the business restructuring is nearing completion. During the suspension of trading, the company announced that it plans to transfer 76% of the shares of the subsidiary Kuaiwei Technology for 133.7 million yuan, which is expected to generate equity transfer revenue of 50.1228 million yuan. We believe that with the divestment of Kuaiwei Technology, the restructuring of the company's business is nearing completion, and the 2016 annual report is expected to have a good harvest. The sword refers to leading companies in the artificial intelligence 2.0 era. While speeding up the completion of traditional business, the company proposed the goal of building a leading enterprise in the artificial intelligence 2.0 era in due course. It quickly laid out in terms of capital and industry, and demonstrated strong execution. 1) Capital level: Establish an industrial fund with leading domestic enterprise groups such as TCL and Yintai; at the same time, the majority shareholder group level signed a strategic cooperation agreement with Cyberle to set up an industry incubation fund to serve the construction of the “Zijin Innovation Town”; 2) Industrial level: join forces with Zhejiang University to gather the strongest research strength in the school to jointly build an AI joint research institute; based on the opportunity of double innovation, jointly invest and operate an AI industry base with Zhejiang University. After a series of combo punches, the company's AI strategy and execution path have gradually become clear. Investment proposal: After the acquisition of Huatong Cloud and the divestiture of Kuaiwei Technology, the company's business restructuring will come to an end, and the performance will be further consolidated, eliminating the worries of transformation and laying a good foundation for the subsequent development of artificial intelligence. Considering the performance contributions brought by the sale of Zhonghe Technology and the transfer of Quickway Technology this year, the company's net profit for 2016 and 2017 is estimated to be 300 million and 350 million yuan, maintaining a buy-A rating, and a target price of 23 yuan for 6 months. Risk warning: AI transformation is falling short of expectations.