Incident: On December 25, 2015, Yongda Group announced the “Plan to Issue Shares and Pay Cash to Purchase Assets and Raise Supporting Funds and Related Transactions” to acquire Haike Finance. We believe that this acquisition means that Yongda will officially transform into a financial holding platform and will be involved in direct investment, third-party payments, online loans, and big data in the future. On the evening of January 1, 2016, the company announced that trading will resume on January 8. We expect the company's 2015-2017 EPS to reach 0.70 yuan, 2.54 yuan, 2.79 yuan, and the target price for 6 months is 38.3 yuan. Switch products are the main source of revenue and gross profit for the main business. The company's main products are switches, switch cabinets, transportation facilities, and electricity meters. From 2011 to the first half of 2015, switch business revenue accounted for more than 60% of main business revenue, and switch business gross profit accounted for more than 80% of main business gross profit. The transformation of financial holding platforms is progressing steadily: (1) The main business is difficult to support the rapid development of the company. From the end of 2011 to the first half of 2015, the company's operating income and net profit continued to grow negatively year on year, and net profit only achieved positive growth after completing its participation in Fushun Bank in 2014. (2) Participating in Fushun Bank obtained large investment returns. By the end of June 2015, the company had achieved investment income of 26.87 million yuan through shareholding in Fushun Bank, accounting for 71.3% of net profit. (3) Acquire Haike Rongtong to create a new online financial situation. Through its wholly-owned subsidiary Haike Rongtong, Yongda has achieved a broad presence in the fields of third-party payments, online lending platforms, crowdfunding, and microfinance. Haike Rongtong is mainly engaged in third-party payment services, and is developing an Internet lending platform business through its holding subsidiary Zhongxin Financial. It is preparing to launch an Internet crowdfunding business through preparations by its wholly-owned subsidiary Zhongxin Zhongtong Investment, and plans to establish a new company with Haidian SDIC to engage in Internet microfinance business. (4) Establish a subsidiary, Yongda Innovation, and enter the field of direct investment. The company invested in the establishment of Yongda Innovative Financial Services (Shenzhen) Co., Ltd., a wholly-owned subsidiary in the Shenzhen-Hong Kong Cooperation Zone in Qianhai, Shenzhen. In the future, the direct investment platform will focus on communication and information, intelligent technology, the Internet, finance, energy saving and environmental protection, education and other fields with good industry prospects to seek domestic and foreign investment and mergers for Yongda Group. (5) Those who bid for life insurance targets want to participate in the blue ocean of life insurance. According to the announcement, the company is currently bidding for shares in the life insurance company. If the company successfully bids, then it can successfully participate in the life insurance industry and further consolidate the financial control platform. (6) The synergy effect of “traditional finance+internet finance+big data” will ferment. Commercial banks can provide Internet finance with fund storage, credit, innovative financial services, etc. Internet finance can provide marketing and promotion assistance for traditional financial services represented by commercial banks, etc., and customer migration between the two will also become more frequent. The development of traditional finance and internet finance has not only provided raw data support for the construction of big data platforms, but also provided application output ports for them to achieve a virtuous cycle. Investment advice: We expect the company's 2015-2017 EPS to reach 0.70 yuan, 2.54 yuan, 2.79 yuan, and the target price for 6 months is 38.3 yuan. Risk warning: The decline in banking sector performance exceeded expectations, and the development of internet finance fell short of expectations