The company announced on December 12 that it continued to reduce its stock holdings and increase its earnings performance by reducing its holdings of “Tongyu Heavy Industries” shares by 1.06 million shares through centralized bidding, returning the capital of 39.27 million yuan, and achieving an investment income of 31.27 million yuan. This reduction in holdings is the fourth time in the past six months that the company has sold “Tongyu Heavy Industries” shares through centralized bidding or bulk transactions. A total of 32.89 million shares were sold, achieving investment income of 161 million yuan, and 10.57% of the shares were still held after the reduction was completed. The company also sold 1.95 million shares of “Huadong CNC” shares through bulk transactions, achieving an investment income of 26.64 million yuan. By reducing stock holdings and returning funds, the company has greatly boosted overall performance, which is conducive to meeting the company's capital needs in developing venture capital business and further promoting venture capital business development. Cooperate to establish venture capital funds to steadily advance overseas layout. The company plans to jointly establish venture capital funds with the US China Economic Cooperation Group and Shandong Lingrui Equity Investment Fund Management Company, which will support the country's double innovation policy and invest in innovative cutting-edge technology projects around the country's strategic emerging industries, including artificial intelligence, smart cars, big data and cloud computing. In principle, the investment amount of funds in the US and China will be allocated on a 1:1 basis. It will combine advanced international venture capital concepts and localized investment operations to create a professional venture capital fund with an international perspective. The company also participated in investing in the US company Intarcia by investing and increasing capital in its wholly-owned subsidiary Qilu. This follow-up investment is expected to become the company's first investment business in the US, increasing the company's overseas asset allocation, and is an important step in the international strategic layout. The project reserves are sufficient. At the end of the first half of 2016, the company held shares in 9 listed companies and 9 proposed IPO projects. Among them, Huaxin Ruicheng Investment was reviewed by the Development and Review Committee. In addition, 18 investment projects were listed on the New Third Board. The floating profit of the listed projects will effectively support the company's future performance. The proposed IPO and the new Third Board listing project will bring considerable investment returns to the company with a flexible exit mechanism. In 2016, the company completed the establishment of 5 funds. Focusing on new materials, new energy, health and other related fields in Shandong, Sichuan, etc., the company seizes local economic advantages and policy support, and cooperates strategically with other institutions. Market-based and specialized operations are expected to further expand its influence and achieve considerable investment returns. State-owned enterprise reform expectations maintain the wealth of financial assets under Lu Xin Group, a shareholder of the “increased” rating company, including high-quality assets such as Zhongtai Securities, Minsheng Securities, Shandong International Trust, and AMC. As an important listing platform under the Shandong State-owned Assets Administration Commission, the company will benefit from the catalytic reform of Shandong state-owned enterprises in the future, and is expected to integrate resources and undertake financial support for local industrial resources. EPS is expected to be 0.6, 0.65, and 0.66 yuan respectively in 2016-18, corresponding PE is 38X, 35X, and 34X, and the target price range is 25-28 yuan, maintaining the “gain” rating. Risk warning: The progress of the reform is not as good as expected, the market exit mechanism is not smooth, and investment projects have lost a large amount of money.