Incident: The company's announcement on the evening of the 25th showed that the company purchased 100% of Shanghai Meidu's shares with 360 million yuan in cash, and the target company's 2017-2020 performance promises were 25 million yuan/30 million yuan/36 million yuan/42 million yuan, respectively. Core view: expand the teaching product circuit horizontally and improve the company's vocational education industry layout. Shanghai Meidu is an education company that mainly provides international curriculum education services and high-end financial courses. It has a curriculum system of nearly 10 mature majors, such as accounting, finance, and business administration, and rich strategic cooperation resources for universities and enterprises at home and abroad. It has set up 4 admissions offices in China, directly covering the enrollment channels of more than 700 middle schools, and has rich admissions experience and channel resources. We believe that the acquisition of Shanghai Meidu is expected to collaborate with the company's vocational education sector, move from pure science and technology to the field of financial teaching products, enrich the company's product system; enter the field of study abroad, connect with undergraduate and master's degrees from overseas universities, and meet the international education needs of different students through various further education models and various course plans, and improve the quality of the company's teaching system. Strategically lay out the field of vocational education, and ICT+ vocational education go hand in hand. The company is the largest measurement and testing instrument provider in the wireless communication field in the market and the most mature wireless network end-to-end solution provider in China. In 2016, it acquired One Core Intelligence to enter industrial robotics and the Internet of Things field to expand and strengthen its main business. The company entered the field of vocational education through the merger and acquisition of Zhixiang Information in 2014, and formed a higher education vocational education business system centered on Dingli College through its two capital increases totaling 490 million yuan. Currently, the company has cooperated to establish 11 Dingli Colleges, providing talent training directions for 23 majors, and the number of students enrolled is expected to reach 15,000 by the end of the year. In the future, the company will focus on building the industrial layout around Dingli College, establishing Sino-German Dingli College for teaching cooperation at home and abroad, raising teaching standards and customer unit prices and sharing levels; and promoting the expansion of the number of campuses and product systems to expand the cake. We are long-term optimistic that the company will grow bigger and stronger through the continuous layout of the vocational education field, and the increase in the campus occupancy rate is expected to contribute to performance. Equity incentives bind long-term interests, and industrial funds help advance the vocational education layout. The company has implemented equity incentives of 1.6 million shares. The performance assessment target is that the 2017-2019 performance growth will not be less than 35%, 60%, and 100%, respectively, from 2016. It is expected to further bind long-term interests and ensure the stability of the company team. The company and Cyberle Foundation plan to establish a 1 billion yuan education industry fund. The initial phase is 300 million yuan, and the company will invest 50 million yuan. Through the establishment of an industrial fund, the company will increase its layout in the field of vocational education to expand and strengthen Dingli College. Profit forecast and valuation: Considering that this acquisition is expected to increase the company's performance, we expect that the company's net profit for the 17-19 exam preparation will be 2.0/25/300 million yuan, and the EPS preparation for the exam will be 0.37/0.47/0.56 yuan, corresponding to PE29/23/19 times, covering the first time, and giving it a “highly recommended” rating. Risk warning: Education integration falls short of expectations, and traditional main businesses have declined sharply