Investment Highlights: Announcement/News: Chutian Expressway issued an announcement on Friday evening. The company's issuance of shares and payment of cash to purchase assets and raise supporting capital and related transactions were conditionally approved. After the transfer is completed, the two main businesses will develop collaboratively. With this fixed increase, the company will use 1.26 billion yuan to acquire 100% of the shares of the domestic ODM company Miki Smart. Of these, 70% of the shares issued will be paid, and the remaining 30% will be paid in cash for supporting financing. The cost of issuing shares and supporting financing is 4.64 yuan/share. After the fixed increase is completed, the company will develop from a single road production business to a dual main business of electronics and road production. Miki's advantage lies in good hardware capabilities and excellent cash flow. Miki Intelligence ranks around 15 in the domestic ODM field, and its main customers are in developing countries such as India and Indonesia. We believe that Miki has two core advantages: on the one hand, Miki has been manufacturing hardware for many years. In addition to high-ranking tablets and mobile phones, Miki has a rich product line. It has jointly developed Golo series connected car OBD products with Hong Kong Stock Company Yuanzheng Technology, and also co-developed medical case products with ZTE. In addition, smartwatches, VR glasses, etc. are involved, providing multiple possibilities for the company's future performance growth; on the other hand, since overseas customers mostly pay in cash and checks, Miki's profit is relatively fast. It is only around 100 million, but it is relatively solid. Under the premise that smartphones and tablets in overseas markets are still not saturated, future performance is unlikely to decline. Future cooperation: low cost funding+state-owned enterprise projects+epitaxial mergers and acquisitions. Chutian and Miki's hand in hand, or high-speed electronics, is an innovation in expressways. We believe that future cooperation between the two companies will probably revolve around three levels: 1. Low-cost capital. As a high-speed enterprise, Chutian has an ultra-low cost capital advantage. By providing cash flow, it can expand Miki ODM's order capacity, and is expected to start cooperating with domestic companies with long accounts in the future; 2. After the acquisition is completed, Miki will become a 100% state-owned holding company, and there may be more opportunities for cooperation on state-owned projects in the future; 3. If Chutian continues to merge and acquire in the future, it will expand Miki more effectively hardware capabilities. Achieve employee shareholding, or significantly increase employee motivation. The fixed increase was adopted through the employee stock ownership plan. The total number of shares held by employees was 8.494 million shares, of which 500,000 shares were held per management. After the Shenzhen Express equity incentive was denied, it was limited by policies. Chutian will be the only A-share high-speed enterprise to achieve employee ownership in the next 1-2 years. The incentives in place may bring new vitality to the company. The valuation is moderate, there is plenty of room for performance improvement, and purchases are maintained. After the delivery is completed, the total market value of the company will reach about 10 billion dollars. Although the company's overall valuation level is in the middle, given the high growth expectations of future electronics manufacturing and related fields, and there is room for performance improvement in the two new paths, we believe this stage is a good opportunity to buy and hold. We maintain our profit forecast. We predict that the company's net profit for 16-18 will be 430 million, 476 million, and 520 million yuan. After dilution, EPS will be 0.25 yuan, 0.27 yuan, and 0.30 yuan, respectively. The corresponding PE will be 23 times, 21 times, and 19 times, respectively, maintaining the purchase rating.