Investment logic: Time and time: At a turning point in the private giant New Hope Group's industrial upgrading and diversified financial strategies, the development prospects are good. In September 2016, Baoshuo Co., Ltd. completed the issuance of shares to purchase 95.01% of Huacheng Securities's shares and raised 7.36 billion yuan in supporting capital. At the end of 2016, Baoshuo Co., Ltd. held 97.44% of Huacheng Securities's shares. The majority shareholder of the company is New Hope Group, owned by the famous private entrepreneur Liu Yonghao. New Hope Group has ranked among the top 500 Chinese enterprises for 14 consecutive years. The Group's assets amount to more than 75 billion yuan, and it has various financial business layouts such as banks, securities, internet finance, and funds. Baoshuo Co., Ltd. has become a holding platform with the securities service industry as the core. The company's future development strategy is to strengthen holding platform construction, develop, or explore relevant financial formats and fintech institutions with comprehensive synergy in mergers and acquisitions, and form a diversified financial holding group with comprehensive synergistic effects through the management of various assets, fintech R&D advantages, and differentiated core competitiveness. Geography: The company is located in Baoding and is at the forefront of national Xiong'an strategy. Before the company Baoshuo absorbed Huacheng Securities, its leading products were energy-saving and environmentally friendly pipes and profiles, complemented by the real estate business. Of the company's revenue of $1,115 million in 2016, $689 million came from the securities industry and $333 million came from the building materials industry. The building materials industry business includes PVC pipe fittings, PE water supply and gas pipes, PP-R hot and cold water pipes, and a full range of pipe fittings such as PVC-O pipes with new technology, new materials, energy saving and environmental protection, PVC profiles, high-end “passive house” profiles, plastic steel doors and windows and components. Baoshuo Pipe Company is the vice chairman unit of the Plastic Pipeline Professional Committee of the China Plastics Processing Industry Association. It has world-class PVC and PE pipe production lines imported from Germany, and the product testing center is a national product testing center. The construction of Xiong'an New Area is bound to drive the building materials industry. Baoshuo Co., Ltd. will benefit from the construction of a new, large-scale city in Xiong'an by getting the first one month. In terms of real estate business, the subsidiary (40% equity) has ten parcels of land in Baoding, of which 9 are urban residential land and 1 plot is for accommodation and catering, mainly located on Chaoyang North Street, Lekai North Street, and Shenzhuang Road. As of the end of May 2015, the book value of Baoshuo Real Estate's total assets was $1.36 billion. The construction of Xiong'an New Area is bound to drive the surrounding real estate market, with Baoshuo Real Estate's real estate project bearing the brunt of revenue. Investment advice: The overall valuation of the brokerage industry is undervalued and needs to be repaired in the future. The company's building materials and land reserves are all highly related to the construction of Xiong'an New Area, and their value needs to be reassessed. Optimistic about the company's long-term development potential and maintaining the “buy” rating, the 2017-2019 EPS is expected to be 0.49, 0.59, and 0.71, respectively, with a target price of 20 yuan/share for six months. Risk warning: risk of fluctuations in securities business performance, stricter supervision, policy risks, etc.