Incident: On March 15, 2016, Rong Sheng Ultra Micro released its 2015 annual report. According to the annual report, the company achieved operating income of 819 million yuan in 2015, a year-on-year decrease of 17.25%, and net profit attributable to owners of the parent company was 107 million yuan, an increase of 206.8% over the previous year. The macroeconomy is declining, and the growth rate of the main business is slowing down: Currently, the domestic economy is declining, and the GDP growth rate continues to decline, from 7.7% in 2012 to 6.9% in 2015 (WIND data). Weak domestic market demand and increasingly intense competition in the company's industry have led to a slow growth rate of the company's main business and poor profitability. The company's net profit loss of 7.866 million yuan after deducting non-recurring profits and losses in 2015. Fixed increases enhance capital strength and raise the company's profit level: In November 2015, the company received approval from the Securities Regulatory Commission to issue no more than 142,299,578 new shares. The total amount of capital raised is expected to be no more than 1011.75 million yuan (company announcement). After the fixed increase, capital restrictions on the company's business expansion will weaken, the diversified financial business layout is expected to be further deepened, and the company's profit level will increase. Laying out diversified finance and transforming financial control platforms: The company actively expands finance-related businesses and lays out brokerage, factoring and financial leasing. In the future, it will achieve organic integration of financial capital and industrial management, and comprehensively transform financial control. (1) Joint venture brokerage firms promote complementary development: In January 2016, the company announced that it plans to cooperate with Hong Kong Shang Cheng Asset Management Company and Shenzhen Chuangsheng Asset Management Company to establish a joint venture securities company in Guangdong. The company holds 30% of the shares, Hong Kong Shang Sheng holds 51% of the shares, and Shenzhen Chuangsheng holds 19% of the shares (company announcement). The improvement of the multi-level capital market is conducive to increasing the proportion of direct financing and brings opportunities for the development of the securities industry. The company seizes the opportunity of cooperation between Guangdong and Hong Kong to invest in the establishment of securities companies, and will achieve complementary development of capital management and industrial management in the future. (2) Rich profit models in commercial factoring: In June 2015, the company announced that it intended to invest in the establishment of a wholly-owned subsidiary with commercial factoring as its main business in Qianhai New Area of Shenzhen. The macroeconomic economy is declining, and the total amount of accounts receivable of enterprises continues to grow, driving the development of commercial factoring business. The company's development of factoring business will reduce the company's financing costs while enriching its profit model. (3) Financial leasing enjoys huge space: In July 2015, the company announced that it intended to invest in the establishment of a financial leasing joint venture. Currently, China's leasing penetration rate is between 4% and 5%, far below the level of 15% to 30% in developed countries (estimated by the Financial Leasing Professional Committee of the China Banking Association). By setting up financial leasing subsidiaries, companies can enjoy huge market space, broaden revenue sources, expand financing channels, and improve financing efficiency. Investment advice: Buy-A investment rating. We expect the company's 2016-2018 EPS to be 0.15 yuan, 0.31 yuan, 0.62 yuan, and the target price for 6 months is 33.26 yuan. Risk warning: risk of approval of a brokerage license; operational risk