Incident: On February 25, the company announced that Changshi Communications, a wholly-owned subsidiary, and Huaping Information Technology Co., Ltd. (“Huaping Information”) signed a framework agreement on the “Small Base Station Communication Infrastructure Project Cooperation Agreement” on February 21. On January 4, the company announced plans to issue convertible bonds. It plans to issue bonds of no more than 1.2 billion yuan, mainly for base station operation projects, integrated communication platform projects, etc. Comment: 1. Facing the large-scale site selection demand for 5G network construction, the base station site resource pool. According to our forecast, the total demand for 5G macro stations in China will reach 6.27 million (equivalent to 1.7 times that of 4G), while the number of 5G micro base stations is expected to exceed 10 million units (relatively speaking, 4G is basically 0). The large number of base station site selection requirements in the 5G era, compounded by the current lack of base station site data support, has provided a great opportunity for companies to lay out base station resource pools. 2. With long-term advantages+forward-looking layout, the 5G base station resource pool project has broad prospects. As a third-party communication network technology service provider with cross-regional and comprehensive operation and maintenance capabilities, Changshi Communications currently has branches in 25 provinces and regions including Guangdong, Yunnan, Inner Mongolia, and Zhejiang. Staffing in the business coverage area is configured according to a grid to provide transmission and network maintenance services for existing service operators. By reusing existing network maintenance service staff and adding site resource library managers and network planning technical supervisors in each region, Changshi Communications can quickly carry out site resource pool construction work and complete the optimal site planning and selection in multiple dimensions of “site availability+coverage effect+construction cost+usage cost+engineering efficiency”. 3. The troika goes hand in hand. The company has continued to push the company to basically complete the troika side by side layout in the past few years: complete mergers and acquisitions, enter the first tier of enterprise SMS service providers in China, actively lay out scenario applications, and profitability is expected to continue to improve; mergers and acquisitions of Changshi Communications to become the first tier of network maintenance service providers in China, and build a 5G site resource pool for 5G reserves. Based on the rapid development of mobile payments, using its own communication resources to gradually participate in artificial intelligence applications, financial technology business efficiency is expected to improve dramatically. Profit forecast and investment recommendations: The company's restructuring business has been completed, and a successful transformation from traditional retail and real estate industries to communication service industries has been achieved. Currently, the company is positioning itself as a leading cloud communication scenario operator in China. It will use the acquisition of Jiahua Information in 2018 as an opportunity to integrate Genesis Channel and Jiahua Information SMS services to improve cloud communication capabilities, and at the same time combine the newly acquired external call center cloud communication services, use big data and artificial intelligence technology to provide capacity output for financial enterprises, create leading domestic cloud communication scenario operators, and forward-looking deployment of 5G base station site resource pools for 5G, with broad prospects. The troika goes hand in hand. We are optimistic about the company's medium- to long-term development. Considering the gradual increase in the 5G base station resource pool, we raised net profit in 2019-2020 from 360 to 450 million yuan to 399 million and 507 million yuan, corresponding to PE 22 and 17 times, maintaining an increase in holdings rating. Risk warning: Listed companies confirm the risk of greater goodwill and impairment of goodwill, risk of poor asset integration, and the SMS industry is facing industry competition to further reduce gross profit margin