The core idea is to acquire Huashanglong and enter the field of electronic components distribution: In 2015, the company acquired 100% of Shenzhen Huashanglong's shares and successfully entered the electronic components distribution industry. Huashanglong is a powerful domestic electronic component distributor, and has agency rights in China for some products from 16 companies including Panasonic and Rohm. After the acquisition, distribution became the company's largest business, driving rapid growth in the company's size and performance. In 2015-16, the company's revenue increased by 261% and 138%, respectively, and net profit after deducting non-return to mother increased by 139% and 362%, respectively. 2017Q1 revenue and net profit after deduction continued to increase, reaching 126% and 207%, respectively, year over year. Implementing an epitaxial integration strategy is rapidly expanding, which is expected to benefit the development of the industry: given the low profit margin nature of the distribution industry, scaling up is an inevitable choice for distributors to take advantage of their competitive advantage, and mergers and acquisitions are the main path. Using the large-scale expansion of the financing platform, the company integrated local distributors such as Joint Chuangtai and Hiworth, and expanded its agent brands to MTK, SK Hynix, Huiding, etc., and rapidly strengthened its strength and became a domestic distribution giant. The localization of the electronics industry has brought about a huge demand market for electronic components in China. The domestic downstream market is fragmented, the distribution market has not yet formed a monopoly phenomenon, the increase in the concentration of upstream original manufacturers, and the rise of local electronics manufacturers have brought development opportunities to local distributor giants, and the company is expected to benefit from the development of the industry. Expanding the product line to emerging industries brings new opportunities: in 2017, the company and Shenhua collaborated to enter the AMOLED polarizer business; as a distributor of SK Hynix, the company will benefit from the development of SK Hynix's SSD business; as a supplier in the era of relays, Panasonic and leading lithium battery company Ningde, the electronics of automobiles and the spread of new energy vehicles are expected to increase the company's performance. Build an online and offline cooperation to build the entire industry chain layout: the company creates an online platform “Yousoft Cloud” that can vertically penetrate the entire electronic information industry chain, and cooperate online and offline to build the entire industry chain layout. Currently, we have more than 5,500 corporate customers. Financial forecasting and investment advice We forecast the company's EPS for 17-19 to be 0.27, 0.37, and 0.41 yuan, respectively. According to comparable companies, we gave the company a 17-year 36x PE valuation, and the target price was 9.7 yuan, giving it a purchase rating for the first time. Risk indicates that the company's performance may be affected by macroeconomic fluctuations, the risk of business development falling short of expectations, and the risk of impairment of goodwill.