Investment points: The company issued a fixed increase plan. It plans to issue no more than 56.5 million shares at a price of no less than 7.34 yuan/share, and raise no more than 400 million yuan in capital for the construction of smart factory clusters and integrated foreign trade service platform projects, intelligent upgrading projects for private brand marketing channels, and warehousing and logistics base projects. Trading of the company's shares resumed on September 19. The smart factory integration and foreign trade integrated service platform project and the private brand marketing channel intelligent upgrading project are committed to improving the informatization and intelligence level of the company's overall operations. (1) Internet+garment manufacturing is an industry trend: Under the new trend of industrialization, digital information technology is integrated with industrial manufacturing, and upgrading the production process from “manufacturing” to “intelligent manufacturing” is a trend. (2) Smart factory integration and foreign trade integrated service platform project: The smart factory cluster will raise the level of production automation and intelligence, extend the application of intelligent production systems in key outsourcing factories, and form a smart factory cluster. The integrated foreign trade service platform will open up the company's foreign trade system and manufacturing system, achieve a seamless connection between industry and trade through information sharing, and at the same time socialize the service functions of the integrated foreign trade service platform to serve small and medium-sized export enterprises in the Jiaxing region. (3) Private brand marketing channel intelligent upgrading project: The company will carry out intelligent upgrading of its own brand marketing channels, including three parts: upgrading online and offline stores, building a customer profile and CRM system based on big data analysis, and building a rapid supply chain system. The warehousing and logistics base construction project expands the company's influence in raw material production areas and promotes the development of the company's supply chain management business to a higher level. The project provides warehousing and logistics supporting services and supply chain value-added services for enterprises in the cocoon silk industry. The main revenue is warehousing service fees, supply chain supervision service fees, site leasing service fees, logistics transportation service fees, and consulting and testing service fees. It mainly includes the establishment of a warehousing and logistics base in Yizhou, the establishment of a centralized silk cotton processing zone and a cotton trading market in Yizhou, and the establishment of a distribution transit warehouse in Jiaxing. The company announced in August that it has held a total of 88.78% of the shares of the Golden Silkworm Net Supply Chain Management Company through acquisitions and capital increases. It is optimistic that the company will use Silkworm Net to carry out supply chain management services in the cocoon and silk industry, and that increasing the controlling interest will have a positive effect on shareholders' profits of listed companies. (1) The original name of the Golden Silkworm Network Supply Chain Management Company is “Jiaxing China Cocoon Silk Market Development Co., Ltd.”. It is the first national cocoon silk professional trading market. Its “Silkworm Network” is the first national B2B trading platform for cocoon silk in the country. The “Jiaxing Index” compiled by the “Golden Silkworm Network” directly affects international cocoon prices. 80% of the global cocoon silk trade is concentrated in China. We believe that the golden silkworm net is expected to integrate the domestic market and obtain global pricing power, and there is huge room for future development. (2) The company's capital increase of 80 million yuan will be earmarked for Zhejiang Jiaxin Financial Leasing Co., Ltd. to carry out supply chain financing business in the cocoon silk industry. (3) This fixed increase in warehousing and logistics base project will assist the Golden Silkworm Net Supply Chain Management Company to form a supply chain warehousing logistics system covering the production area of cocoon silk raw materials in Guangxi and the entire industry chain in the Zhejiang Silk Products Deep Processing Zone. The company is a high-quality target for “intelligent manufacturing” upgrades for garment manufacturers. The level of informatization and intelligence is constantly improving, and integrating upstream and downstream resources of the industry to create closed-loop supply chain management services continues to advance. We have long been optimistic about the development prospects of the company's “Golden Silkworm Network” trading platform and maintaining the “buy” rating. We lowered EPS in 16-18 to 0.14/0.17/0.19 yuan respectively (the original forecast for EPS in 16/17 was 0.24/0.28 yuan after dilution), and corresponding PE was 60/50/43 times, respectively. We are optimistic about the company's advantages in the operation of the entire industry chain and supply chain management. It is expected that the future position of the industry will continue to improve and maintain the buying rating.