Incident: In order to improve the upstream and downstream air ticket agency industry chain, Beijing Liantuo (51Book), a holding subsidiary of the company, acquired 90% of China Airlines Tesco's shares with 20 million yuan, making it a subsidiary of Beijing Liantuo Holdings; the target company's 2016-18 commitment to deduct non-net profit was 300/400/5 million yuan. Comment: The company's 51Book acquisition of China Airlines Tesco will expand air travel distribution channels, upgrade product operations, and obtain relevant data services, improve the upstream and downstream of the industry chain, and maintain an increase in holdings rating. ① China Airlines Tesco is a comprehensive provider of air travel solutions, covering services such as ticket purchasing agency distribution, travel management, and big data operations. ② After the acquisition, 51Book will gain greater information and channel advantages on the distribution platform, and at the same time fully expand into the air travel business. ③ 51Book will continue to focus on the expansion of traffic and entrances, while connecting with core tourism resources to create a comprehensive B2B2C platform. The 2016/17 EPS was maintained at 0.35/0.41 yuan, and the corresponding target price was maintained at 14.56 yuan, increasing holdings. China Airlines Tesco is an air travel solutions provider that has built a complete e-ticket trading platform. ① Relying on the resource advantages of its own Tesco cloud fare data, China Airlines Tesco has now become the leading one-stop ticket distribution and price comparison platform and mobile travel solution provider in China. Its partners include ticket agents, 2B and 2C platforms, and third-party payment agencies. ② China Airlines Tesco includes four major segments: Tesco Cloud (provides an air travel data interface), Air Travel Connect (air travel integrated business management system), corporate travel (TMC travel management system), and Tesco (B2B procurement platform for air travel products). ③ The size of the target company expanded rapidly: January and January 2016 had revenue of 660,000 yuan and net profit of 251,700 yuan (annual revenue of 700,000 yuan, net profit of 336,000 yuan). The acquisition will improve the layout of the 51Book air ticket agency industry chain while providing a series of value-added services. ① After the acquisition, Beijing Liantuo held 90% of the shares in China Airlines Tesco, and Gu Jie, the original actual controller of the target company, held the remaining 10% of the shares. The target company promised to deduct non-profit of 300/400/5 million yuan in 2016-18. After completion, there were equity incentives, and both parties achieved a win-win situation. ② After the acquisition of China Airlines Tesco, 51Book not only expanded B-side channel distribution, but also had significant price and channel advantages on ticket agencies, but also added multiple services such as one-stop online sales publication and billing, automated price comparison and ticketing, and corporate travel management. ③ In addition, 51Book has also obtained a relatively complete “data interface+platform+system” full product chain, which has fully optimized and upgraded the application of big data and system transformation. 51Book will continue to expand its traffic portal and create a comprehensive B2B2C platform. ① The company's transaction flow is expected to reach 20 billion yuan in 2015, but it will still focus on expanding traffic entry and strengthening the two major platforms of PC and mobile. ② Building an airline agency platform: The company cooperates closely with Air China, China Eastern Airlines, Mountain Airlines, etc., and has launched an innovative “Flight+X” business holiday cooperation model to connect with core tourism resources. ③ Enhancing profitability: The company has more than 600 distribution platform product suppliers and more than 200,000 buyers. In the future, it will strengthen the supply chain clearing capabilities of the entire platform and use the 51Book wallet to expand into financial derivatives business. Risk warning: The progress of e-commerce platforms has fallen short of expectations; the overall air ticket agency market has shrunk.