In view of the current state of the secondary market, Qi Chuangneng, the second shareholder of the company, decided to withdraw the "reduction Plan" issued on January 12, 2016 and announced on January 13, 2016 in order to maintain market stability. We raised the target price to 24.50 yuan to maintain the buy rating.

Support the main points of rating

Qichuangneng's original plan to reduce its stake of no more than 1670000 shares from February 3, 2016 to March 10, 2016 is now cancelled. The withdrawal of the two shareholders' plan to reduce their holdings shows the determination and confidence of the company's share price during the maintenance period, after the company acquired a 100% stake in the car rental network. the main business has changed from the traditional commercial retail business to a new commercial service business that relies on vehicle mobile tools to provide end-consumer services through the Internet function, and the possibility of purchasing assets related to the department store retail business will not be ruled out in the next three years. There are more points to be seen in the future.

Main risks faced by rating

The business operation of the transformation is lower than expected.

Valuation

After the completion of the acquisition, the main business will change from the traditional commercial retail business to a new commercial service business that relies on vehicle mobile tools to provide institutional customers and end consumer services through the Internet function. This business transformation will enable the company to enjoy a high valuation premium. Assuming that the rental car network consolidates its statements in 2015 and the equity issue is completed in 2016, we maintain the fully diluted earnings per share forecast for 2015-17 at-0.405, 0.012 and 0.252 yuan, raising the target price from 20.50 yuan to 24.50 yuan per share and maintaining the buy rating.