Investment highlights: events. On June 27, 2017, the company's issuance of shares and payment of cash to purchase assets and raise supporting capital and related transactions were approved by the China Securities Regulatory Commission. The company plans to acquire 100% additional shares of “One Core Intelligence” with a transaction amount of 666 million yuan. Of this, 70% of the consideration will be paid by issuing shares, and 30% of the consideration will be paid in cash. The price of the shares issued this time is 1226 yuan/share, and a total of 38.26 million shares were issued to counterparties. At the same time, the company plans to issue no more than 10,486,000 new shares. As supporting capital for this asset purchase, the total amount raised will not exceed 132.97 million yuan. Moving from communications to the Internet of Things, the original main business is expected to be strategically upgraded after the fixed increase is completed. In recent years, the traditional communication market has become increasingly saturated, and domestic telecom operators have strengthened their Internet of Things layout. The company adapts to industry trends and actively expands the IoT industry on the basis of consolidating existing business. As a leading product and service provider of application solutions for the Internet of Things industry in China, “One Core Intelligence” has strong synergy with the company in terms of strategy, business, and customer resources. The acquisition will further increase the company's revenue and profit scale, and promote the integration of the company's software and information services with intelligent manufacturing. In 2017-2019, “One Core Intelligence” promised profits of not less than 50 million yuan, 60 million yuan, and 80 million yuan, respectively. After the merger and acquisition is completed, the company's profitability is expected to increase. The full amount of capital raised by the support comes from the employee stock ownership plan, which is conducive to the synergy of interests of senior management. The company plans to raise funds in support of the non-public offering of shares in the Guangfa Asset Management Plan (asset management plan to hold shares on behalf of company employees). All of the funds raised will be used to pay cash consideration for the transaction. The asset management plan mainly involved company executives and some core employees, such as Zhu Danian, director and general manager of the listed company, Zhang Tianlin, chairman of the board of supervisors, and Zhang Yize, supervisor. The total subscription amount for directors and supervisors was 91.45 million yuan, accounting for 68.77%. The large participation of core management is conducive to achieving synergy of interests between employees and enterprises, demonstrating the confidence of listed companies in future development. Investment recommendations and performance forecasts. 2016 was the year of the successful layout of the century. Revenue and profit increased moderately, and various layout results and operating indicators were positive. In the first quarter of 2017, the net profit of shareholders of listed companies was RMB 31.3942 million, an increase of about 30.54% over the previous year, achieving a good start. The state's policy support for the industry-education integration project, and now that the scale of cooperation between Dingli University is advancing, the company's education equipment business demand is expected to heat up. In the medium to long term, after experiencing a period of layout and climbing, Dingli University will bring significant added value to the company's performance. The company's internal and epitaxial growth logic is clear. It uses overfunded capital to build the Sino-German International School and the Internet of Things incubation base project, and invests in Jianomunde. The epitaxial layout continues to increase, the strategy is clear, and execution is strong. We continue to be optimistic about the company's high-quality genes and historical opportunities to apply practical vocational training in ICT and other applications. The company's cooperative model of running schools based on applied courses addresses the pain points of higher education and has a first-mover advantage. After maturing, Dingli College is expected to accelerate replication and become a new driving force for performance growth. We forecast the company's net profit in 2017-2018 to be 183 million yuan and 274 million yuan respectively, corresponding to EPS of 0.37 yuan and 0.55 yuan respectively. Based on the valuation level of the same industry, 41 times PE was given in 2017, corresponding to the target price of 15.17 yuan/share, maintaining the buying rating. Risk warning. Outreach layout, progress of Dingli University falls short of expectations, market risks, business risks, etc.