Written earlier: We believe that Luxin Venture Capital is a scarce A-share venture capital target with both performance and favorable policy catalysts. With the country's determination to focus on building a multi-level capital market, we believe that Luxin Venture Capital will use the advantages of the listed platform and its reserves and strength over many years in terms of own capital investment and fund management to achieve long-term stable growth in performance. This article focuses on explaining our views on the company in terms of the high growth of the venture capital industry itself and the intrinsic value of Luxin Venture Capital. The reserves of invested projects are abundant, and the funds under management have reached the harvest period: as of 2016 H1, the company and the funds funded by the company as the main sponsor held a total of 9 shares in listed companies, 9 proposed IPOs, and 18 investment projects listed on the New Third Board. Among the listed projects with a total book value of 1.74 billion yuan (as of 2016 H1 data), the market value of the listed projects is about 3.6 billion yuan, or nearly 2 billion dollars. Among the 9 proposed IPOs, Shanghai Guao Electronic Technology Co., Ltd. (Huaxin Ruicheng Investment) has passed the review by the Development and Review Committee. We believe that the fuying formed by the listed projects will provide strong support for the company's current year and future performance, and that the nine proposed IPO projects mean that the company has plenty of projects to be withdrawn. Furthermore, the funds under management of the company will enter an exit period next year, and high performance growth can be expected. Fund regionalization and specialization to explore overseas asset allocation. In the first half of 2016, the company and various funds managed by the company invested a total of 18 projects, with an investment amount of 705 million yuan. Currently, the amount of funds managed by the company is estimated to be about 10 billion yuan. A fund was launched in the first half of 2016 to cover high-growth emerging industries such as health, new materials, and civil-military integration. In July 2016, the company's board of directors and shareholders' meeting deliberated and passed a bill to participate in the investment in the US company Intarcia Therapeutics Inc. The Intarcia project is expected to become the company's first investment business in the US and increase the allocation of overseas assets. The construction of multi-level capital markets is beneficial to the venture capital industry, and fund-raising management and withdrawal continues to improve. On September 26, 2016, the State Council issued a number of opinions supporting the development of venture capital, putting forward supporting opinions on broadening capital access, tax incentives, listing support, and exit channels. Specific measures to facilitate the development of venture capital are expected to be introduced one after another. The venture capital “fundraising and management withdrawal” process has gradually improved, encouraging investors from various types of institutions such as state-owned enterprises, state-owned enterprises, insurance capital, and university funds to invest in venture capital companies and venture capital parent funds through multiple channels. At the same time, compared with the suspension of IPOs last year, the expansion of new third-board market makers to private equity institutions has also gradually cleared the exit channel for projects. Investment advice: I am optimistic that Luxin Venture Capital will continue to open up market capitalization space as a scarce target for A-shares with both performance and policy catalysts. We expect the company's net profit for 2016-2018 to be 5.31, 6.52 and 795 million yuan, up 136.82%, 22.88%, and 21.88% year-on-year. EPS in 2016-2018 will be 0.71, 0.88, and 1.07 yuan, corresponding to PE 35.7, 29.1, and 23.9 times, respectively. According to the Segment Valuation Law, we gave the company's own capital investment, fund management, and the market value of Shandong Guoan Trust and Minsheng Securities held by the company was 104.1 billion yuan, 100, 9.3 billion yuan, and 1.06 billion yuan in that order. The total reasonable market value was about 22.4 billion yuan, and the target price for 6 months was 30 yuan, which covered the “buy” rating for the first time! Risk warning: Risk that policy support falls short of expectations; capital markets will continue to be sluggish.