Incident: Through the “Company's Proposal on the Acquisition of 100% of the Shares of Shanghai Chenghuang Jewelry Co., Ltd.”: The subsidiary company Shanghai Laofengxiang Silver House Co., Ltd. acquired 56% of the shares of Shanghai Chenghuang Jewelry Co., Ltd. held by Agricultural, Industrial and Commercial Real Estate (Group) Co., Ltd. through public bidding on the Shanghai Joint Property Exchange in accordance with the relevant regulations of the Shanghai Joint Property Exchange, and the transaction price determined after the successful auction. Guangzhou Yizuan Jewelry Co., Ltd., natural person Zhao Dehua, and natural person Meng Jian, were acquired through an agreement transfer method. Hua holds 20%, 16%, and 8% shares in Shanghai Chenghuang Jewelry Co., Ltd., respectively. Comment: According to the Shanghai Chenghuang Jewelry website, the company is located at the gateway to the Chenghuang Temple Yuyuan business district. It is a large state-owned jewelry enterprise characterized by gold, platinum, jewelry and jade management. The company has three major shopping malls and dozens of jewelry chain stores covering all urban areas of Shanghai and the five provinces of Jiangsu, Zhejiang, Anhui, and Luyu. According to the Shanghai Stock Exchange website, in 2012, 2013, and January to July 2014, Chenghuang Jewelry's operating income was 538 million, 686 million, and 313 million, respectively, with net profit of 6.4402 million, -3,0857 million, and 3.2486 million. The 56% stock auction price for Shanghai Chenghuang Jewelry is 116 million yuan, and the overall valuation is not less than 207 million yuan. We believe that if Lao Fengxiang successfully acquires Chenghuang Jewelry this time, he will be able to obtain some high-quality outlets, increase the company's competitiveness in Shanghai and surrounding areas, help the company integrate resources, and expand market share. This incident also shows that the company is actively working to fully implement the company's business strategy to “expand the market, improve the brand, and strengthen the enterprise” and enhance the market competitiveness of the “Lao Fengxiang” gold and jewelry core industry. We continue to be optimistic about Lao Fengxiang as a leading jewellery company in China, expanding resources through extension and integrating resources to enhance his performance. Continue to give Lao Fengxiang B a highly recommended rating. In 2014, 13.5 times PE, with a target price of $3.90.