A fixed increase strengthens the foundation of financial control, and AMC leaders are calling for an incident: On March 14, 2016, the company released its 2015 annual report and issued shares to purchase assets and raise supporting capital and related transactions. According to the annual report, the company achieved operating income of 7.703 billion yuan in 2015, a year-on-year decrease of 25.51%; according to the fixed increase plan, the company plans to purchase 100% of Zhejiang Asset's shares, 56% of Zhejiang Gold Trust's shares, 100% of Dadi Futures's shares, and 50% of China and Korea Life Insurance's shares. The growth rate of the main business is slowing down, driving transformation and seeking change (1) The slump in the industry is driving the transformation of the company. In 2015, the company's revenue was 7.7 billion yuan, down 26.87% year on year (company announcement). Currently, China's economy is declining, GDP growth continues to decline, the real estate and commodity distribution industry is declining, and the growth rate of the main business is slowing down, prompting the company to seek change through business expansion. (2) State-owned enterprise reforms bring development opportunities. The 2016 government work report proposed to promote development through reforms and resolutely fight the battle to improve the quality and efficiency of state-owned enterprises. Since then, the 13th Five-Year Plan has proposed integrating various elements of financial resources. The actual controller of the company is the Zhejiang Provincial State-owned Assets Administration Commission. In the future, the company may use its state-owned enterprise background to take advantage of state-owned enterprise reform and welcome development opportunities. Steady growth deepens financial layout (1) Get involved in the management of non-performing assets and build a local AMC leader. The company invested a fixed increase in Zhejiang AMC Zheshang Asset Management Company, a subsidiary of Zhejiang International Trade Group, which is the majority shareholder. The market size of the non-performing asset industry has increased, and local AMC has ushered in development opportunities. In the fourth quarter of 2015, commercial banks' non-performing loan balances reached 1274.4 billion yuan, an increase of 431.8 billion yuan over the fourth quarter of 2014 (Banking Regulatory Commission data, same below), while local AMC licenses are scarce. By the end of 2015, there were 18 local asset management companies (company announcement). In the future, the company will take advantage of the development of the non-performing asset management industry to improve overall competitiveness and build a local AMC leader. (2) Lay out trusts, futures and life insurance, and use industry development to take off in the future. The size of trust assets showed a growing trend. The size of trust assets grew 16.6% year on year in 2015 (China Trust Industry Association data); the futures industry investor structure was optimized, with the number of investors in the futures market reaching 820,000 in 2014 (company announcement); life insurance premiums grew rapidly, and the original premium income of life insurance increased 24.97% year on year in 2015. At the same time, the 13th Five-Year Plan policy favors the insurance industry, and the insurance channel will be further relaxed, and the product structure is more diverse. In the future, Zhejiang Jin Trust, Dadi Futures, and China Korea Life are expected to use industry advantages to enhance the overall competitiveness of the company's financial control platform, develop the company's funding sources, optimize the company structure, and raise the company's profit level. Financial licenses have been broadened comprehensively, and financial control has been actively transformed. Based on Guojin Leasing, Oriental Finance and Guomao Oriental Capital, the company carries out three major financial businesses: financial leasing, direct investment and capital management, providing services for its own transformation based on investment innovation and business innovation. After the company's fixed increase is completed in 2016, it will further lay out comprehensive finance and comprehensively transform financial control by holding local AMC, trusts, futures and life insurance. Investment advice: Buy-A investment rating, target price of $28.94 for 6 months. We expect EPS from 2016 to 2018 to be 0.96 yuan, 1.13 yuan, and 1.25 yuan respectively. Risk warning: macro risk, business integration risk, policy risk