Investment points: The company's business is complicated, involving real estate development, trade logistics, engineering construction and manufacturing, and its profitability is poor. Growth in businesses such as real estate, building materials, and new energy was weak, and some businesses continued to lose money. Revenue in '15 fell to 40% in '13, and there was a loss in performance. Continuously optimize the industrial structure, divest enterprises that continue to lose money, and reserve space for deep transformation. The company has been divesting the photovoltaic new energy sector business, which has continued to lose money in 15 years. We believe this is only the first step in divestment. Loss-making businesses are expected to be divested one after another in the future, thereby increasing the company's overall profit level and leaving room for deep transformation. Transform IC testing and strive to be the industry leader. The company issued shares to acquire 100% of Echo Semiconductor's shares. The transaction price is 1.08 billion yuan, the issue price is 10.76 yuan, and the assets have already been transferred. At the same time, the company plans to issue shares to raise a total of no more than 1,068 billion yuan in supporting capital. The supporting capital will be used for Echo Semiconductor's test capacity expansion and construction projects and to supplement the working capital of listed companies. Demand is strong plus import substitution. The mainland IC industry is in a golden period of development. The target annual IC output value for the next five years is 20%, reaching 140 billion US dollars. Domestic electronics consumption has always been at the forefront of the world, driving huge demand for power integrated circuits. In 2015, the import and export deficit of the entire integrated circuit industry in China was US$16.9 billion, and there is huge room for import substitution. The development of the integrated circuit industry has risen to the level of national strategy, with policy support+big fund support. Big funds will drive local governments and social capital into the integrated circuit industry, and the total scale is expected to reach trillion dollars of investment. Independent testing is the next trend in vertical segmentation of the IC industry. The reasons are as follows: 1. With the complexity and high-end of chips, testing has begun to run through the entire industry chain. For packaging companies, packaging is the core, testing is only supporting, and there is no time to consider design-side testing; 2. The complex development of chips places increasing demand for high-end testing. High-end testing is expensive and professional, and the requirements for more accurate test results can only be deeply studied by third-party testing companies that focus on testing. China's IC testing industry will maintain rapid growth in the future. The growth logic is twofold. First, China's closed testing industry will continue to maintain rapid growth. Second, with the development of high-end domestic testing and increasing emphasis on the testing industry, the output value of China's testing industry will slowly increase as a share of closed testing output. The market space for the testing industry in mainland China is expected to reach US$15.8 billion by 2020. Elko Semiconductor is mainly engaged in IC test program development, test program and process development, wafer test production, and chip product testing and production. The company has a complete technical library of test solutions that can respond quickly to customer needs. The company has signed orders with a number of high-end domestic and foreign customers such as Zhanxun, Startech Jinpeng, and Redico. The positioning of high-end testing and the help of financing platforms for listed companies to increase production capacity are expected to create leading third-party testing companies in mainland China. First coverage, giving a buying rating. Net profit for 16-18 is expected to be 146/2.62/407 million yuan, of which Echo's profit for the next 7 months after 2016 was combined. For a reasonable valuation, we used the company's profit for the year 17/18. Considering the share capital spread after the non-public offering raised capital, the EPS for 17-18 was 0.45/0.70, and the corresponding PE was 37/24. Considering the rapid growth of the company's performance and the company's leading position in the field of independent testing, as well as expectations of capital management, 50 times PE, the target price is 23, 30% higher than the market price, and a buying rating is given.