Matters: The company signed a “Memorandum of Understanding” and related supporting documents with the target company, all shareholders, and Hong Kong Refining in relation to the acquisition of 100% of the shares of Gardner Air Holdings Limited through Hong Kong's wholly-owned subsidiary Chemical Investment Limited. The purchase price was £326 million. Investment Essentials 1. The target company is a leading manufacturer of aerospace components in the industry. Successful acquisition will strengthen the company's industrial layout Gardner Airlines is a large multinational enterprise with advanced aerospace component production and system integration in Europe. Its business scope includes the manufacture, assembly, and maintenance of aerospace components. It has more than 4,500 employees worldwide, has established factories in the UK, France, Poland and India, and is headquartered in the UK. With annual revenue of over $200 million, the company is in a leading position in the European market. The acquisition will strengthen the company's industrial layout in the aerospace field, form an aviation industry chain covering the development and production of aero engine blades, aero engines and other components, and complete drone aircraft, enhance the company's technical strength, and help the company develop markets. 2. The company is actively promoting business transformation, and is expected to usher in an inflection point in performance. The company specializes in molybdenum powder extraction and smelting. Due to the downturn in the downstream steel industry, the company's performance continues to decline. Currently, the company has shut down this business and is actively transitioning to aerospace. Rhenium is an associated ore of molybdenum. Rhenium-nickel-based alloys have excellent high temperature properties and are currently the main material for manufacturing advanced aero engines and gas turbine blades. Relying on its resource advantages, advanced rhenium purification technology, and strong accumulation in the field of ultra-high temperature alloy manufacturing, the company gradually transitioned to aviation business and made good progress. At present, the alloy materials and mass-produced blades independently developed by Chengdu Aerospace, a wholly-owned subsidiary of the company, have obtained relevant certification. The first mass-produced monocrystalline blade has already passed user acceptance and achieved a certain amount of sales revenue. More customers are in the process of certification; in terms of engines, the core engine tests of the 750 kg thrust engine and 1000 kg thrust turbofan engine of Chengdu Zhongke Aero Engine Co., Ltd. are progressing smoothly. In the future, as the aviation business begins to earn revenue one after another, the company is expected to usher in an inflection point in performance. 3. The large-tonnage unmanned transport aircraft is about to be tested. Using SF Dongfeng to deploy drone logistics SF Express is the primary strategic partner and core customer of Langxing Drone, the company's joint venture subsidiary. The joint venture will prioritize the development of two high-tonnage unmanned transporters for SF Group to meet the needs of the SF Group's rapidly growing high-end express transport market. Currently, the program design has been reviewed by experts, the prototype has been completed, and test flights are planned at the end of 2016. SF Express has obtained 4.41 million shares and 0.97% of the company's shares through participation in the company's targeted issuance. It is the company's sixth largest shareholder. It is expected that the company will continue to deepen cooperation with SF Express and actively expand the field of drone logistics. 4. The profit forecast predicts that in 16-18, the company will achieve net profit attributable to the parent company of -03 million, 44 million, and 108 million yuan, corresponding EPS of 0.00, 0.08 million yuan, and corresponding PE of -5115X, 298X, and 121X. The initial rating is recommended. 5. Risk suggests that new business development falls short of expectations.