1. Online classroom bidding in Anhui Province officially began, unraveling the 5 billion national market. On May 15, the Bidding Center of the Anhui Provincial Education Commission announced the public tender for government procurement for the 2014 Anhui Online Classroom System Procurement Project (23 counties (cities and districts)). The tender content included five packages: the first package of key equipment for online classrooms, the second package of LCD televisions for the main classroom, the third package for receiving classroom audio equipment, and the fourth package for receiving classroom cameras, and the fifth package system integration. Tender requirements: (1) The bidders for the first, second, third, and fourth packages shall have multimedia engineering cases implemented in the education industry. The bidders for the fifth package shall have a computer system integration qualification certificate of level 1 or above, and have multimedia engineering cases that have been implemented in the education industry. At the time of bidding, the first package of bidders must provide samples consistent with the brand and model of the products submitted in the tender documents to the bidding site, and build a complete demonstration environment based on the online classroom county-level server, online classroom main lecture classroom, and online classroom receiving classroom equipment. (2) The first and five-package bidders in the province must set up after-sales service stations in each project county (city, district) to provide after-sales service for this project. Bidders from other provinces should have local after-sales service capabilities. They can be branches or cooperate with an after-sales service provider in Anhui to provide after-sales service for this project. Let's briefly analyze the bidding situation: (1) The procurement scale of key equipment for online classrooms is about 10 million. Of the five packages, the second, third, and fourth packages are all general equipment, and the fifth package is system integration. The competition threshold is not high. Only the first package requires high technical product strength and clearly requires case experience and after-sales service capabilities. According to our understanding, Huaping Co., Ltd. has previously participated in the pilot projects in the first two counties of Fanchang County and Nanling County in Anhui Province, so it has obvious advantages in terms of products, cases, and services, and is more likely to win the bid. According to the “Notice on Launching the First Batch of Online Classroom Construction Work in Our Province” (Anhui Secretary (2014) No. 76) issued by the Anhui Provincial Department of Education on February 24, the current online classroom project in Anhui Province includes 23 counties (districts) including Feidong County and Wuhu County, 339 main lecture classrooms, and 727 receiving classrooms. Jin Yan, deputy director of the Anhui Provincial Department of Education, once told the media that it would cost 70,000 yuan to build a lecture classroom and 35,000 yuan to accept one classroom. Referring to Huaping's previous sales prices of similar products, we judge that the scale of key equipment for online classrooms alone is at the level of 10 million, and the overall construction scale is 50 million. (2) The market size of key equipment for online classrooms in Anhui Province is over 100 million, and the national market is 1 billion to 2 billion. There are slightly more than 100 administrative units at the county (district) level in Anhui Province, and there is still 4-5 times more room for construction. The market space for key equipment for online classrooms in Anhui Province is over 100 million, and the country's 30 provincial administrative units estimate the overall construction scale to be between 1 billion and 2 billion. (3) The total construction scale of online classrooms is about 5 billion. According to the statement of the head of the Information Technology Promotion Office of the Ministry of Education, China has more than 60,000 teaching sites across the country. According to estimates of the capital invested in the construction of 70,000 yuan for leading classrooms and 35,000 yuan for receiving classrooms in Anhui Province, the overall online classroom market size can reach more than 4 billion to 5 billion yuan. We estimate that in addition to special equipment, Huaping Co., Ltd. will also compete selectively for other general equipment and integration projects. 2. The process of promoting online classrooms, from demonstration to promotion of online classrooms, is a classroom teaching method innovated by Anhui Province to promote “full coverage of digital education resources at teaching points” and rely on information technology to effectively solve the problem of rural teaching sites and opening full courses. Through the construction of online classrooms, teaching sites are radiated with the relatively high quality educational resources of central schools, effectively solving the problems of lack of teachers and low levels of teachers at teaching sites, helping rural areas to unify teaching sites and promote balanced development of compulsory education. The progress of the online classroom pilot work in Anhui Province is as follows: (1) In May 2013, experiments were carried out in Fanchang County and Nanling County in Anhui Province, and initial results were achieved. (2) At the end of October 2013, more than 10 central and local media outlets, including People's Daily, Xinhua News Agency, **** Daily, CCTV, China People's Radio, Anhui TV, and Anhui Daily, visited Fanchang County in Anhui to report on the online classroom pilot. (3) On February 24, 2014, the Anhui Provincial Department of Education issued the “Notice on Initiating the Construction of the First Batch of Online Classrooms in Our Province” (Anhui Secretary (2014) No. 76), officially announcing the launch of the online classroom project in Anhui Province. It was confirmed that 23 counties (districts), including Feidong County and Wuhu County, were the first batch of online classroom construction units, and a total of 339 lecture classrooms and 727 receiving classrooms were built. The original progress in this document is as follows: January-February 2014, preliminary preparations such as online classroom application and selection; February-March, equipment bidding and procurement; April, equipment installation; online classroom management, teaching application and related technical training work; and beginning in May-June, comprehensive normalized teaching was carried out. Judging from the actual bidding process (bidding only began at the end of May, about 2 months behind schedule), we estimate that after August, the pilot institutions will be able to normalize teaching in the new semester. We believe that the pilot in Anhui Province is only the beginning of China's full commencement of online classroom construction and narrowing the gap between urban and rural education resources. We estimate that after the new semester starts, there will be more media reports on the construction of online classrooms in Anhui Province, and visits and studies will also be carried out within the education system. The national market is expected to fully open up in the second half of the year. 3. The results of online classes are good, and investment is guaranteed. The number of students in some remote regions of our country is limited, and there is an acute shortage of teachers. Local students lack sufficient communication with their classmates and teachers, and are unable to enjoy the teaching and teaching of high-quality teachers. In particular, there is a lack of highly specialized courses such as art and music, which has become a major obstacle affecting the fairness of education in remote regions. Historically, our country has also tried to use accommodation systems and teachers commuting to the countryside, etc., but due to many factors such as traffic conditions, living conditions, time costs, etc., it is difficult to sustain it for a long time. Using technical means, two-way video transmission technology, and using the online classroom model to change the issue of fairness in educational resources has become the only realistic option currently. Using broadband networks and supporting information technology equipment, through real-time video interaction, teachers from central schools in townships or districts and counties directly provide high-quality courses for students at teaching sites in remote areas. In particular, state-regulated courses such as music, art, etc. cannot be offered in the past, so that children in remote areas can also listen to the lectures of famous teachers from central schools in counties, towns, or townships at the same time. One main lecture classroom corresponds to one or two or three receiving classrooms. In the course of online classes, teachers at teaching sites in remote areas also received training at the same time, enhancing local teaching ability. Wang Hongyue, director of the Wuhu Education Bureau, commented that online classes “will allow teaching sites to open classes that cannot be offered, such as music, art, etc., and improve the quality of language and mathematics courses.” Typical scene: (1) At the “Online Simultaneous Classroom” lecture classroom teaching site at Pingpu Town Central Primary School in Fanchang County, through modern information technology, mathematics teacher **** taught in real time to second-year students at the Hantang teaching site more than 10 miles away, while at the Hantang teaching site, there is also a teacher assisting in teaching. On the 42-inch electronic screen in the main classroom, the image between the teacher and student is clear, the sound is clear, and the questions and answers are clear. (2) At the Meichong teaching site in Suncun Town, Fanchang County, 14 first-year and second-year students are attending an “online” music class. The lecturer is Jin Ming, a teacher at Chengguan Experimental Primary School in Fanyang Town in the county. What they are studying is “A Family of Chicks.” Under Teacher Jin's leadership, the students sang in a chorus: “Big rooster, stretching his neck, singing, whoa, singing, it's singing, it's dawning...” By receiving the 55-inch electronic screen in the classroom, Teacher Jin's language was clear, and the movements he played as a rooster came to life. From time to time, Mr. Jin also named and asked questions to students who are more than 10 miles away from him. The online classroom project is part of the Ministry of Education's “Full Coverage of Digital Education Resources at Teaching Points” project, and capital investment is guaranteed. In 2012, according to the requirements of the “Opinions of the General Office of the State Council on Regulating the Layout and Adjustment of Rural Compulsory Education Schools” (issued by the State Administration (2012) No. 48) and the “Notice of Nine Departments Including the Ministry of Education on Accelerating Current Key Tasks in Education Informatization” (Education Technology (2012) No. 13), the Ministry of Education decided to fully launch the “Full Coverage of Digital Education Resources at Teaching Points” project, which aims to transmit high-quality digital education resources to 67,000 teaching sites across the country through IP satellites to help remote rural areas develop state-regulated curricula to satisfy school-age children to receive good education nearby Basic requirements. Since implementation in November 2012, the “Full Coverage of Digital Education Resources at Teaching Points” project has progressed smoothly. Currently, more than 20 provinces have completed bidding for equipment, and 9 of these provinces have begun using it, ensuring the smooth flow of network facilities. The relevant departments of the Ministry of Education provide free digital teaching resources for teaching sites, and the central financial administration provides 5,000 yuan for each teaching site. However, all funding for online classroom construction projects in Anhui Province is coordinated at the provincial level. We believe that after years of construction, teaching sites in various parts of our country already have a good foundation in basic information equipment. Subsequent capital investment will favor more targeted applications such as special equipment for online classrooms. Continued growth in education funding will guarantee long-term investment in online classrooms. 4. Accumulate experience in the education industry and look forward to the comprehensive layout of online education in the future. Essentially speaking, online classroom programs are still a typical B2G model, and Huaping does not directly contact users. However, we believe that the significance of this project is that Huaping has begun contacting customers in the education industry, and will form cooperative relationships with schools and teachers in project implementation and follow-up services in the future. If the teaching site uses equipment provided by Huaping to record and transmit teaching materials, then Huaping will also begin to have indirect access to teaching materials (ownership belongs to the school). The company previously began experimenting with promoting the online piano education business through the acquisition of part of Reiki Piano's shares to build a video teaching interactive platform for teachers and students. We believe that judging from the fact that piano manufacturers such as Helen and Pearl River are also actively promoting similar businesses, there is no doubt that the online piano education market has opened up. For the company, bidding has begun, and the online classroom market has opened. We are optimistic that the company will win the bid for this project, then explore the online education market through various models of endogenous extension, and raise the company's rating to “buy.” We forecast Huaping's EPS for 2014-2016 to be 0.43 yuan, 0.54 yuan, and 0.72 yuan, respectively. The target price of 21.60 yuan is given for 6 months, corresponding to a price-earnings ratio of about 40 times that of 2015. If the new business expands smoothly, the company's performance is flexible to a certain extent. Relying on its advantages in video and audio transmission and coding and decoding technology, the company has successively deployed in the fields of smart education, smart medical care, smart homes, etc., and has guaranteed the team's enthusiasm through an employee shareholding model. If a breakthrough is achieved in related fields in the future, it will receive more attention from the market and become a stimulating factor for stock prices. Major uncertainties. The uncertainty of government purchase orders, the risk that major customers account for too much revenue, the risk of repayment of BT projects, and the risk of falling expectations for new business development.