Investment points: The company's traditional main business is the ultra-high resolution digital splicing wall system business, which actively transitioned to the field of preschool education in 2015. The company's traditional main business is the R&D, manufacture, marketing and service of ultra-high resolution digital splicing wall systems. Its products are mainly used in information centers in public safety, energy, transportation, finance and other industries to centrally manage and monitor various businesses. In 2017, the sector achieved revenue of 660 million yuan, an increase of 0.41% over the previous year, contributing 58% of the company's revenue. The company has accumulated many advantages in technology, marketing, brand and management in the field of large-screen splicing business. Currently, this sector is in a stage of steady development. In 2015, the company began to transform into the education sector. It successively acquired Hongying Education and Golden Cradle, and completed the acquisition of Kerr Education and Dingqi Preschool Education in 2017. By the end of 2017, the company's preschool education brand owned nearly 5,000 kindergartens. The preschool education sector achieved revenue of 480 million yuan in 2017, an increase of 21.3% over the previous year, contributing 42% of the company's revenue. Early childhood education has become an important part of the company's business. The preschool education industry chain continues to improve its layout. The company currently owns four major brands: Golden Cradle, Hongying Education, Kerr Education, and Dingqi Preschool Education. It has nearly 5,000 affiliated kindergartens, and has the highest market share in the field of preschool education. In terms of education and research, Hongying Education and Golden Cradle both have self-developed kindergarten curriculum systems, and are strong in education and research. In addition to this, the company has also established strategic partnerships with specialized companies in various fields such as Kindergarten Pocket, Rui Yi, Chula Reading, Huameng Star Sports, Wonder Workshop, and Cloud School. In 2017, the company raised 918 million yuan in capital through a non-public stock offering, which will be used for the construction of children's arts and sports training centers. The company recently invested in Kerry Alliance to obtain a 35% stake in Sesame Street English, further consolidating the layout of the preschool education industry chain. Kerry Union specializes in English training for children. Established in 2013, Kerry Alliance mainly operates the children's English training business under the “Sesame Street English” brand. It is the exclusive licensee of “Sesame Street English” in mainland China (excluding Taiwan and Fujian), Hong Kong and Macau. Its target customers are children aged 3-12. By the end of 2017, Kerry Alliance had a total of 6 direct-run stores and 348 contracted member schools (197 have already begun operation), with a cumulative total of more than 50,000 students. According to the announcement, Kerry Alliance's net profit after deduction in 2016 and 2017 was 13.84 million yuan and 46.95 million yuan respectively, and it promised that the net profit for 2018 to 2020 would not be less than 50 million yuan, 61 million yuan, and 74 million yuan respectively. According to this commitment, Kerry Alliance's performance CAGR for 2017 to 2020 was 16.4%, and the performance target was relatively reasonable. Sesame Street English has strong brand awareness, and the founder has rich experience in operating the education industry. Our analysis believes that this investment is conducive to increasing the company's brand awareness and improving the layout of the preschool education industry chain. Profit forecast and investment rating: The company has now formed a dual business pattern of ultra-high resolution digital splicing wall system business and kindergarten operation management services. Based on existing advantages, the original main business will tend to expand in the direction of software and services, and strive to become a comprehensive solution solver for control rooms. The education sector, on the other hand, is gradually improving the existing preschool education industry chain, strengthening brand management, building education service platform systems and product systems, and enriching the ecosystem of the preschool industry. It is estimated that the company's EPS in 2018 and 2019 will be 0.28 yuan and 0.33 yuan respectively, and the corresponding PE will be 38 times and 32 times, respectively. With the liberalization of the two-child policy and the trend towards early age education, demand related to early childhood education is expected to continue to rise, and the company will benefit from it. First coverage, giving a buying rating. Risk warning: the performance of the acquisition target falls short of expectations; policy risk; increased industry competition; kindergarten safety risk