Incident: The company announced that it plans to acquire 70% of the shares of Beijing Shenzhou Aviation in cash, with a target share transfer price of 315 million yuan. Comment: 1. It is planned to acquire 70% of Shenzhou Aviation's shares in cash and expand its military informatization business. According to this transaction plan, the company plans to acquire 70% of Shenzhou Aviation's shares in cash, with a target share transfer price of 315 million yuan. The latter is a high-tech enterprise specializing in military computers, military bus testing machine simulation equipment, signal processing and navigation, and industrial automation data acquisition and testing platforms. Related products are used in various fields such as military aircraft and armored vehicles, and many types of military products have been and will soon be transferred to mass production. If this acquisition is successfully completed, it will promote the expansion of the company's military informatization business and the company's transformation into this field. In terms of performance commitments, as agreed by all parties, using the sum of non-net profit deducted during the three-year commitment period from 2018 to 2020 as the performance commitment (for gambling) indicators, the target company achieved a total net profit of 120 million dollars in deducted net profit during the three-year commitment period, which is regarded as fulfilling the performance commitment. Furthermore, the transferor promised that the net profit from deductions for each year from 2018 to 2020 will not be less than 30 million, 40 million, and 50 million, respectively. If the relevant requirements are not met during the commitment period, the amount of shares lifted in that year will be reduced accordingly. If profits are increased in subsequent years to make up for the gap, then the progress in lifting the sales restrictions will also be made up. 2. Synergies are expected to drive the competitiveness of the military informatization business and enhance the competitiveness of the military informatization business. Shenzhou Aviation Company, which is to be acquired this time, has extensive business collaboration with Chengdu Fourier in terms of technology, products, and markets. The two companies can achieve mutual support, develop technology and contribute technical resources in various fields. In particular, they have strong synergies in military avionics products, missile guides, and drone mission payloads. The products and services of Shenzhou Aviation and Chengdu Fourier can be used on the same weapon platform to jointly address customer system needs; the products and technology of Shenzhou Airlines and Chengdu Fourier are combined to support each other in terms of market, and are expected to upgrade to a larger system in the future. The products of Shenzhou Airlines and Chengdu Fourier have upstream and downstream synergies due to their different functions. For example, successfully controlling Shenzhou Airlines this time will greatly expand the company's military informatization industry chain and form stronger competitiveness. 3. The current valuation is 13x, and the opportunities in the field of military informatization are quite certain. Maintaining a highly recommended-A rating regardless of this proposed acquisition project, we predict that the company will achieve net profit of 334 million, 456 million, and 560 million respectively from 2018 to 2020, corresponding to the current stock price PE of 13x, 9x, and 8x, respectively. If this acquisition is successfully completed, the comprehensive strength of the company's military informatization business will be further enhanced, and growth opportunities will be determined. Maintain a strong promotion - A rating. Risk factors: 1. The acquisition was completed; 2. Orders in the field of military informatization fell short of expectations.