Incident: Mingjia jointly announced that it plans to issue shares to acquire 86.5% of the shares of Xiaozi Technology (overall valuation of 700 million yuan) and 90% of the shares online and offline (overall valuation of 448 million yuan). After the acquisition is completed, the listed company will become 100% shareholders of the above two companies. At the same time, the actual controller of the listed company Zhou Jianlin and Huaxia Life Insurance will raise supporting capital of 40.205 million yuan, and all cash payments from the merger and acquisition will be used to increase the company's shares. Among them, Xiaozi Technology promised net profit of 50,000/6500/85 million yuan in 2016-2018, and online and offline promised net profit of 3,500/4600/60 million yuan in 2016-2018. Key investment points: Kid Technology is a new type of internet advertising company guided by deep technology cultivation. Currently, the company's business scope covers all kinds of mainstream mobile advertising delivery models, including online affiliate promotion, boutique promotion, and programmatic advertising. As far as the programmatic advertising business is concerned, the company has now built a more mature Yuzu SSP platform. The Yuzu DSP platform is also being continuously improved and upgraded based on the 1.0 version already launched; the traffic data analysis model has also been recognized by well-known companies, and a data analysis and consulting partnership has been established. In the future, Kid Technology will focus on refining and strengthening the mobile advertising programmatic marketing business chain as a key development direction. Currently, Xiaozi Technology's mobile advertising revenue can be divided into three categories: 1) through online affiliate promotion: providing services for effective connection between advertisers and various media resources across the network. In 2015, Xiaozi Technology provided promotion services for popular app products such as “Tencent Video,” “Didi Taxi,” “360 Film and Television,” and “Baidu Tiebar”; 2) Through boutique promotion, advertisers connect with current hot media in the mobile Internet, and also match high-quality advertising materials for various mobile application products with active users and a long period of growth; 3) Programmatic promotion through the construction of grapefruit Programmatic mobile advertising platforms and data analysis models provide advertisers with more convenient, efficient, and flexible advertising material delivery. This is also a key development direction for the company's future profits, improving the programmatic delivery efficiency of mobile advertising with technical capabilities. Online and offline is a professional mobile information service provider that uses its own enterprise ICT business platform to provide mobile information services to various enterprises. Online and offline mainly provide various SMS services for e-commerce, small and medium-sized enterprises, etc., including information verification, user notifications, and member reminders. In 2015, the number of online and offline SMS sent was about 2.6 billion, an increase of 85.71% over the 1.4 billion sent in 2014, and the business volume grew rapidly. Profit forecast and investment rating: Assuming that this acquisition is successful, we assume that the target company will complete and calculate in 2017, then we expect the overall net profit for 2016-2018 to be 2.63/4.44/525 million yuan, respectively. The total diluted share capital is 351,371,259 shares, and the corresponding EPS is 0.83/1.26/1.50 yuan, respectively, corresponding to the closing price on August 12, PE 40/26/22 times, respectively. Without considering this restructuring, we expect net profit for 2016-2018 to be 2.6 3/33/380 million yuan, respectively, corresponding EPS of 0.83/1.05/1.20 yuan, and PE corresponding to the closing price of August 12 is 40/31/27 times, respectively. We believe that the above investment has further strengthened the company's layout in the field of mobile internet marketing. We have proposed that digital marketing 2.0 is concentrated competition. The key words are data, proprietary media, or in-depth marketing services combined with vertical industries. We are happy to see that Mingjia Joint has further consolidated its mobile Internet layout advantages through the acquisition of Kid Technology (data, media) and online and offline (data). What is particularly noteworthy is that the counterparty promised to increase its total holdings by at least RMB 10.87 million within 12 months after receiving the initial equity transfer, binding the counterparty's long-term interests and demonstrating the counterparty's long-term confidence in the company. We are optimistic about the company layout and maintain the company's “buy” rating. Risk warning: 1) risk of approval of this restructuring; 2) risk of the industry falling short of expectations; 3) risk of evaluation of the subject matter of the transaction; 4) risk of failure to achieve promised performance of the underlying asset; 5) macroeconomic risk and national policy risk;