A “Memorandum of Understanding on Capital Increase/Acquisition” was signed with Bump Education and Siqi Education to separately acquire no less than 10% of the shares of the two companies. On January 20, the company announced that it plans to increase the capital of Bump Education and acquire not less than 10% of the shares of Bump Education (valued at 260 million yuan) in cash; the capital increase of Siqi Education (valued at 600 million yuan) is not less than 10% in cash. After completing the initial shareholding, the company plans to complete the acquisition of all remaining shares of Bump Education and Siqi Education through issuing shares and cash payment methods in the future. After the transaction is completed, the company's strategic deployment in the field of private education will be further improved to help the company continue to develop steadily and rapidly. Bump Education is committed to joining a chain of individualized education for elementary, middle, and high schools. Currently, Bump Education is mainly engaged in personalized education for primary and secondary schools, integrating education and training, education research and development, and live streaming of classrooms between teachers, and focuses on the intellectual development and healthy growth of young people aged 6 to 18. The company uses four cooperation models: standard school franchise, flagship store franchise, city partner, and strategic partner to provide differentiated services according to the different cooperation models to meet the individual needs of franchisees. The education market targeted by the company is mainly second-tier, third-tier and fourth-tier cities in China. Through the latest education technology, it brings first-tier teacher resources to second-tier, third-tier and fourth-tier cities across the country, adheres to the online and offline O2O+ content output model, and promotes fair education with data and services as the core. Up to now, Bump Personal Education has established nearly 700 learning centers in 23 provinces and cities across the country. Siqi Education is a leading brand in the K12 training industry in Hunan. Established in 2009, Siqi Education covers elementary schools, middle schools and high schools. Currently, it has business segments such as cultural cultivation, personalized education, international education, music education, art education, etc., and has a good reputation and brand influence in Hunan and even the central and southern regions. The company's high-quality education content and curriculum development system have helped the company's outlets continue to expand. Siqi Education has become a comprehensive education group integrating basic education systems, higher education systems, family education systems, short-term training systems, education research and development systems, and cultural industry systems. Improve strategic planning in the field of private education. The company continues to promote the layout of the education industry. It has successively acquired Longwen Education (K12 one-on-one), Little Red Riding Hood (direct kindergarten management), and British Education (international education) and signed an agreement with Eddy Education (international education) to acquire 100% of its shares in the equivalent of RMB 2.9 billion. The acquisition of no less than 10% of Bump Education and Siqi Education's shares (plans to acquire all of their shares in the future) will further improve the company's deployment in the field of private education, achieve collaboration of educational resources within the system and enhance the company's ability to integrate high-quality education resources and supply education services; for the future acquisition of more education Market targets lay a solid foundation for integrating high-quality resources in the education industry. Furthermore, the company may become a securitization platform for Huaxia Life Education in the future. Huaxia Life is the company's second shareholder, and synergy effects are expected to gradually show. The company's capital operation continues to move forward, fully demonstrating the company's determination and efficiency in the education sector layout. The company has previously signed a cooperation agreement with Huaxia Industrial. In the future, the company will strive to establish a good capital platform to accelerate the epitaxial drive and actively lay out the K12 related industrial chain, and push the company to enter the fast track of this trillion-level market! Maintain profit forecasts and maintain a “buy” rating. The company continues to move in terms of capital operation, fully demonstrating the determination and efficiency of the company's layout in the education sector. Assuming Little Red Hat completes the delivery next year, not considering Eddy School and this transaction, we expect the company's 16-18 EPS to be 0.11 yuan/0.17 yuan/0.22 yuan, respectively, and PE to be 92X/60X/46X respectively. Risk warning: There is still uncertainty about the subject of the acquisition