On October 20 of the incident, the company issued the “Report on Issuance of Shares to Purchase Assets and Related Transactions (Draft)”, which plans to purchase 100% of Ningbo Haosheng's shares held by Tibet Yinyi by issuing shares. Key points of analysis The acquisition of ARC is progressing in an orderly manner, and the plan has performance promises: the company updated the asset purchase and related transaction reports based on previous inquiries from the exchange, and the acquisition of ARC proceeded in an orderly manner. The transaction plans to issue 480 million shares to Tibet Bank 100 million, with an issue price of 591 yuan per share and a transaction price of 2.85 billion yuan. Tibet Yinyi has promised net profit of 170 million yuan, 260 million yuan, and 330 million yuan after tax for the target company's performance over the next three years. If the performance falls short of expectations, Tibet Yinyi will be compensated by shares obtained from the transaction. ARC has a high market share and a lot of space in the field of automotive safety: with the improvement of automobile safety performance and the gradual promotion of driverless technology, the demand for airbag configuration is becoming more and more obvious. According to GIA statistics, global airbag sales in 2014-2015 grew by 12.8% and 12.0%, respectively, which is higher than the growth rate of passenger car sales during the same period. ARC Group has 6 production sites in 4 countries around the world, and the Group's operating center is located in Knoxville, Tennessee, USA. It is a multinational enterprise specializing in R&D, design, production and sales of gas generators. The Group has good cooperative relationships with major global automobile manufacturers and Tier 1 suppliers, making it the second largest gas generator manufacturer in the world. In 2013-2015, the market share of products sold by ARC Group in China was 9%, 10%, and 11%, respectively, showing an increasing trend year by year. The acquisition of 100% of Belgium's shares is an important point of interest: in mid-June of this year, Dongfangyisheng, a subsidiary of the company's shareholder Yinyi Group, plans to acquire 100% of Belgium's Punch Powertrain (Punch Powertrain) shares. Belgian Bunge is a company focusing on the design and manufacture of CVT transmissions and hybrid systems. In 2007, it set up a company in Nanjing to explore the Chinese market. After nearly ten years of development, it has developed into the preferred supplier of CVT transmissions for domestic independent automobile brands. In the global industrial landscape, it is the third largest transmission supplier in the world after Japan's Jetco and Germany's Bosch. Investment recommendations Since this transaction has not yet been completed, we maintain our profit forecast unchanged. We expect the company to achieve EPS of 0.27, 0.32, and 0.34 yuan respectively in 2016-2018. The current stock price is only 36PE compared to the 16-year results. Considering the company's transformation pattern and real estate resources, we raised our investment rating to “buy”. Risks suggest that real estate settlement falls short of expectations, and the acquisition of ARC and Bunge is progressing slowly.