Description of the incident Lianyungang issued a private issuance plan: The company plans to privately issue no more than 351 million A-shares to no more than 10 specific targets, raise no more than 1.09 billion yuan at a price of no less than 3.17 yuan, and raise no more than 1.09 billion yuan in capital. The fund-raising projects are 55#-57 #通用泊位工程项目和收购鑫联公司75% equity projects. Incident review Asset injection mitigates competition in the industry. After this release, the issue of peer competition between companies and groups has been mitigated. At the same time, Port Group, the controlling shareholding ratio of the company's controlling shareholder will increase from 48.81% before issuance to 49.65%, further strengthening its holding position. Improve specialized handling capabilities and ease production capacity bottlenecks. The fund-raising investment projects issued this time include 5 general purpose berths of 100,000 tons, a storage area of 329,000 square meters, and a total design throughput of 12.86 million tons. Due to the throughput capacity of the port area, the bulk cargo handling berths in Lianyungang are at a high load state. At the same time, among the company's main types of coking coal, wood, alumina and fertilizer, there is currently only 1 professional coking coal terminal. The tonnage and degree of specialization of the fertilizer berths are also low, and there are no specialized coke and timber depots. This acquisition can increase the company's handling and storage capacity for these types of goods, reduce the current shortage of production capacity, and improve the current situation of shortage of production capacity while improving handling and unloading efficiency and competitiveness. Purchase consideration: Approximately 18% off the company's PE price. Statically, the PE consideration paid by the company for the 5 berths purchased through this non-public offering was 10.66 times (13.75/1.29 = 10.66X), but if you consider that the project still needs 2 years to fully achieve production, it is estimated at a discount rate of 4.4% per year (currently the 1-year SHIBOR interest rate is 4.4%), then the dynamic purchase consideration is about 11.62 times. The price-earnings ratio of the company in 2013 was 14.14 times, that is, the current discount rate of the underlying asset compared to the joint stock company is about 18%. Considering that there are still 2 years until delivery, we think a discount rate close to 20% is quite reasonable. The impact of EPS: It is expected to begin to increase after 3 years. According to our estimates, since berths 55-57 were put into operation relatively late, the positive impact of the non-public offering on the company's performance will take 3 years to be reflected. Before the non-public offering, the 2013-2015 EPS was 0.249 yuan, 0.268 yuan, and 0.289 yuan, respectively, and the EPS after distribution was estimated at 0.191 yuan, 0.249 yuan, and 0.298 yuan. If the above berths are completed and put into operation ahead of schedule or if the production period is moderately shortened, the above profit forecast can be raised appropriately. Maintain a “Cautious Recommendation” rating for the company.