Matters: The company's resumption of trading announcement stated: Due to business development needs, the company plans to plan a non-public offering of shares, and trading has been suspended since the opening of the market on January 14, 2016. At the same time, the company plans to form a consortium with an overseas institution to finally acquire shares in an overseas financial industry company in the form of cash. Our comments on this are as follows: Comment: It is planned to increase distribution in a non-targeted manner and focus on building three major business systems. The number of non-public shares issued this time is no more than 300 million shares (including principal amount), and the total amount of capital to be raised is no more than 4.35 billion yuan. The capital raised is intended to be invested in the four projects of “integrated payment projects,” “commercial factoring projects,” “smart living platform construction projects,” and “operation channel construction projects,” and to supplement working capital to further build intelligent life and financial service functions in the IoT industry chain, and achieve close integration and coordinated development of Dahua's original RFID industry with the Internet of Things. At the same time, it is proposed to acquire shares in an overseas financial industry company with an overseas institution. The company is currently implementing industrial upgrading and strategic transformation, forming the three core business systems of the Internet of Things industry, OTT, and innovative Internet finance. Innovative Internet finance is the key direction of the company's strategic development, gradually forming an innovative financial system with tripartite payments, microfinance, factoring, supply chain finance, and financial leasing as businesses. Open up online and offline payment channels to collaborate in financial service business. With the continuous improvement of Dahua's system, the number of users it has imported is expected to increase dramatically. The company has carried out in-depth cooperation with Southern New Media and two OTT licensors in Guangdong, China (currently only 7 in the country), and its users will eventually be introduced into integrated payment projects; in September 2015, Credit Card Pay signed a “WeChat Pay Cooperation Agreement” with Tenpay and Tenpay and Shenzhen Financial Settlement Center, which will improve the promotion efficiency and use efficiency of integrated payment projects using Tenpay's 200 million customers. At the same time, the continuous introduction of various customers, users, and data resources under the Dahua system has made a series of IoT related entities become customers of the company. The company uses financial payments and other methods as entry points for users, grasps flow data, obtains credit information from merchants and consumers through big data analysis, and provides financial services such as commercial factoring and microloans to revitalize the capital of upstream and downstream customers and users, and achieve collaborative and healthy development. The performance growth rate in 2015 was lower than expected due to the impact of the merger. The performance report shows that in 2015, the company achieved total operating income of 1,389 billion yuan, an increase of 75.88% over the previous year, and net profit attributable to shareholders of listed companies increased by 21.22% over the same period last year. In the second half of the year, the company successively completed a number of mergers and acquisitions, such as OTT licenses and cardholder payments, and continued to expand in the RFID payment industry chain, but due to factors such as mergers, the overall profit growth rate fell short of expectations. risk factors. The risk that revenue and settlement of the main business will not meet expectations; the risk that credit card promotion will not meet expectations; the risk of falling gross margin due to increased competition; the risk of mergers and acquisitions integration. Earnings forecasts, valuations and investment ratings. Based on the company's performance report and the recent negative operating environment in the supply chain finance, small and medium loans, and P2P industries, we lowered the company's profit forecast to 0.11/0.34/0.50 yuan (the original forecast was 0.18/0.42/0.56). Given the company's major business transformation in 2015-16, it is expected that 2016 will usher in a significant increase in profit. Without considering the merger of the company's fixed growth projects for the time being, the current stock price corresponding to 2015-17 PE is 177/59/39 times; in terms of industry valuation, considering that the company's transformation performance still needs to be implemented, and the recent obvious correction in GEM's overall valuation, we lowered the company's target price to 23.76 yuan, and the average PEG corresponding to 2016-17 is 0.56 times, maintaining the “buy” rating.