Sanxiang Impression (000863.CH/RMB 7.11, buy) announced on July 17 that Huang Hui, the company's chairman and actual controller, and Sanxiang Holdings, which he holds, have recently increased their holdings of listed companies by 520,000 shares and 2,40,000 shares respectively, while also announcing additional holdings plans. Sanxiang Holdings plans to increase its holdings by no less than 5 million shares within the next 6 months. We believe that at a time when the market is being drastically adjusted, the company's chairman once again increased his holdings and fulfilled his previous commitment to the minimum shareholding increase plan of 2 million shares. At the same time, the announcement of a supplementary plan to increase holdings shows management confidence, and also shows that the company's current market value is clearly discounted at a reasonable valuation level. According to the plan to increase their holdings, it is expected that the majority shareholders will still increase their holdings by at least 3 million shares in the future. We believe that the company's high-quality assets are significantly underestimated. RNAV for the real estate business alone reaches 11 billion yuan, covering the current market value. However, the leading performing arts company promises performance of 160 million yuan this year. In the future, they will join hands with IDG for in-depth cooperation. Collaborative space between the performing arts and real estate business can be expected, which is a scarce target for A-share cultural real estate. We reaffirm the company's buying rating. Incident Sanxiang Impression announced on July 17 that Mr. Huang Hui, the company's chairman and actual controller, and Sanxiang Holdings increased their holdings of some of the company's RMB common shares through the Shenzhen Stock Exchange stock trading system on July 14 and July 17, 2017. The increase in holdings was 520,500 shares and 2,042,102 shares respectively. The increase was based on confidence in the company's future development prospects and reasonable judgment on the company's value. At the same time, the company announced a supplementary holdings increase plan: within 6 months from July 14, 2017, Sanxiang Holdings plans to increase its holdings by no more than 5,000,000 shares through centralized bidding at a price of no more than 9 yuan/share. Mr. Huang Hui and Sanxiang Holdings plans to increase their holdings by a total of no more than 27,659,735 shares, or no more than 2% of the company's total share capital. Comment 1. Increase holdings once again to find out the bottom of value, supplement the holdings increase plan and step up efforts. Mr. Huang Hui, the actual controller and chairman of the company, increased his holdings of the company by a total of 1.94 million shares in May, with a cumulative increase of 10.64 million yuan at an average price of 7.14 yuan/share; recently, he increased his holdings by 520,000 shares again, with an average price increase of 7.24 yuan/share, fulfilling his previous commitment to increase his holdings by a total of 2 million shares. At the same time, the company announced a supplementary holdings increase plan: Sanxiang Holdings, the majority shareholder of the company with 90% of the shares held by Mr. Huang Hui, plans to increase its holdings by at least 5 million shares within the next 6 months. Therefore, we expect to increase its holdings by at least 3 million shares in the future, demonstrating management's confidence in future development and showing that the company's current market value is clearly discounted at a reasonable valuation level. 2. Join hands with IDG for in-depth cooperation, and cultural real estate collaboration can be expected. In May, the company signed a three-year strategic cooperation framework agreement with Shanghai Yunfeng New Investment Center and IDG Capital Investment Advisory Co., Ltd. to jointly integrate, invest and operate cultural tourism projects with scarce characteristics, and will explore the establishment of a special fund. We believe that the company is expected to be deeply tied to IDG's strategic resources. In addition, in the future, the equity ratio for performing arts projects will gradually increase, and there is room for profit growth brought about by real estate and culture collaboration. 3. The margin of asset safety is high, and there is room for excessive decline and repair. The company's real estate business has high-quality reserves, and project costs for layout in hot areas such as Shanghai and Yanjiao are very low. We estimate that the RNAV for the real estate business alone is close to 11 billion dollars, which has basically covered the current market capitalization level. The impression that the company completed the acquisition last year is that it is a leading domestic cultural and performing arts leader. The annual box office revenue for more than 10 shows in major scenic spots across the country is 1.1 billion yuan. This year, it has promised to complete net profit of 160 million yuan, and subsequent cultural real estate synergies will gradually become apparent. Meanwhile, Zhang Yimou and other creative teams participated in the company's fixed price increase of 6.50 yuan/share last year and locked in for 3 years. Director Zhang's indirect shareholding ratio was about 2.64%. We reaffirm the view of the first in-depth report covering “Impressions of Sanxiang: Cultural Real Estate Strikes Together, Style Change Sees Opportunity” released in May. The company's current high-quality assets are significantly undervalued. We reaffirm the company's buying ratings and continue to suggest a low-value layout.