Key investment points, safe view: The company is a housing enterprise based in Ningbo and expanding overseas. In recent years, it has extended high-end manufacturing, and the target industry of mergers and acquisitions has a high position, leading technology, and good growth. It is expected that the two-wheel drive strategy will continue to be implemented in the future, and we are optimistic about the company's continued layout and high growth prospects in the high-end manufacturing field. Based in Ningbo, it lays out comprehensive housing enterprises nationwide to expand overseas. The company is a leading regional housing enterprise in Ningbo, with Ningbo as the main contributor to performance for the time being. In recent years, it has implemented the expansion strategy of “based in Ningbo, focusing on the Yangtze River Delta, and laying out four regions” and achieved results. In 2015, Shanghai's sales had surpassed Ningbo and settled on Jeju Island in South Korea to test the waters overseas. Land reserves are sufficient, and the share of offsite sales will continue to increase. Issuing shares to purchase assets and entering high-end equipment: It is proposed to pay 5.91 yuan per share to major shareholders to acquire ARC Group at a price of 3.3 billion yuan, while raising no more than 825 million dollars in supporting capital to supplement working capital. ARC is the second largest independent airbag gas generator company in the world and the world's leading hybrid gas generator. 60% of ARC's revenue comes from the Xi'an plant in China. The gas generator is the core component of automobile airbags, and is generally made or purchased by airbag companies. ARC has a stable customer base and is a leader in hybrid gas generator technology. The compound revenue growth rate for the past 3 years has reached 19%. In the future, benefiting from the increase in the number of bicycle airbags in China and other countries, and the replacement of pyrotechnic gas generators by hybrid gas generators to pyrotechnic gas generators, ARC is expected to continue to maintain a high growth rate of about 20%. The acquisition of Bungie Power by Yinyi Group and the acquisition of high-end manufacturing have borne fruit again. Bunge Power is headquartered in Belgium and has 40 years of experience in manufacturing stepless automatic transmissions for automobiles. It also has products such as dual-clutch transmissions, hybrid systems, and pure electric drive systems. Bungie built a factory in China in 2007, benefiting from the high growth of autonomous SUVs. Since 2010, Bungie's compound annual growth rate has exceeded 35%. Passenger cars around the world are facing pressure to continue to reduce fuel consumption. China will face unprecedented pressure to reduce fuel consumption in the next five years. CVT is the automatic transmission with the lowest fuel consumption at the same cost, and the smoothness is the best. The penetration rate of China's own brand CVT is expected to rise from less than 7% now to 18% in 2020. The corresponding CVT production and sales scale is expected to be 4-5 times that of now. China's CVT suppliers are scarce, and Bunge Power's mature production capacity is early to support independent brands. It is expected to continue to maintain a growth rate of more than 30%. Profit forecasts and investment advice. While continuously strengthening its main business, Yinyi Co., Ltd. is actively implementing industrial transformation and upgrading, focusing on high-end manufacturing projects with high technology content and strong profitability, and opening up new growth poles. The estimated net profit of the real estate business in 2016/2017/2018 is 59/73/81 million, corresponding to the current share capital EPS of 0.23/0.28/0.31 yuan in 2016/2017/2018. Considering ARC's 2017 consolidated statement and based on the additional share capital after issuance, the EPS is $0.18/0.30/0.34 for 2016/2017/2018. Assuming that ARC and Bungie Power both inject silver billion shares, the net profit of the auto parts business in 2017 can reach about 1.3 billion, corresponding to the market capitalization range of 32.4 billion to 37.9 billion, and the NAV of the real estate business of 10.4 billion, then the company's reasonable total market value range is 42.8 billion to 48.3 billion. First coverage, giving a “recommended” rating. Risk warning: 1) Gas generator recall risk; 2) Poor integration of acquisition business.