Incident: On May 19, the company announced that it plans to use 1.5 billion dollars in cash to participate in the*ST Jinrui non-public offering supporting financing project. This time, the fixed price was increased to a locked issue price of 10.15 yuan/share, with a lock-up period of 3 years. *ST Jinrui's current non-public offering includes two parts. The first is a fixed increase of 1.81 billion shares to Minmetals Group's financial assets from Minmetals Co., Ltd., an affiliated company of the parent group, and 7 other companies; the second is a fixed increase of 1.48 billion shares to 10 institutions including CNOOC, raising 15 billion dollars in cash to raise the capital of the invested financial assets or liquid cash. If the project progresses smoothly, CNOOC will hold 148 million shares of*ST Jinrui, accounting for about 3.96% of the latter's total share capital after a fixed increase. Expected investment, unexpected speed: After the restructuring of COSCO CNOOC, the company positioned itself in shipping finance, and changed its main business to shipping asset leasing, while also involving non-shipping finance, insurance, and investment businesses. Shipping has been at the bottom of the cycle in recent years. After the restructuring of superimposed groups, financial ideas have been explained many times. The current fixed increase in CNOOC's participation did not exceed expectations, but considering that the company only completed asset transfer and delivery with COSCO on March 31, it is likely that the investment business team has not yet been established. We believe that this transaction exceeded expectations at the time it occurred. 1.5 billion dollars participated in Fixed Growth and joined hands with Minmetals Group to build its financial control platform: The main entity of this fixed increase acquisition is Minmetals Capital. If the project progresses smoothly, *ST Jinrui will indirectly hold 67.86% of the shares in Minmetals Trust, 99.76% of the shares of Minmetals Securities, 99.76% of the shares of Minmetals Securities, 99.76% of the shares of Minmetals Securities, 99.00% of the shares of Minmetals Jingyi Futures, and the shares of other financial enterprises related to Minmetals Capital. CNOOC subscribed 148 million shares for 1.5 billion yuan, accounting for 10% of the ancillary financing shares and about 3.96% of the total share capital after the fixed increase. The background is significant. Follow-up projects are not ruled out: 1. There may be policy significance: The two parties involved in this fixed increase are the upstream and downstream shipping giant “China Ocean Shipping Group” and the leading mining industry “Minmetals Group”. At the group level, we believe that CNOOC's participation in this round of fixed growth may have policy significance. 2. The company launched the first round of investment in the business sector after the transformation and restructuring to increase the company's profit points. It is not ruled out that other projects will be implemented in the future. 3. As the Group's shipping finance platform, CNOOC's investment and financing business itself requires the participation and assistance of a large number of financial institutions. This fixed increase is expected to strengthen interaction and communication between companies and financial institutions. Investment suggestions: It is estimated that the company's net profit from 2016 to 2018 will be 4.7 billion, 1.70 billion, and 2.10 billion yuan, respectively, equivalent to EPS of 0.04, 0.15, and 0.18 yuan/share, respectively. This fixed increase event is the company's debut in the capital market after transforming the shipping finance platform. The speed has exceeded market expectations, and it is not ruled out that other investment projects will be implemented in the future. It has some room for imagination, increased its holdings with a -A rating, and a target price of 5.2 yuan. Risk warning: fixed increase is progressing less than expected