The company recently announced that it plans to acquire 100% of the shares of Jiazete held by 13 natural persons in the form of cash and share payments, and also to raise supporting funds from specific investors for non-public shares. The review is as follows: In the property sector, Qiangqiang Joint will have a good synergy effect. Jiaze is a shareholding company. After the transaction is completed, the company will indirectly hold 51.63% of the shares of Shenzhen Science and Technology Park Property Group Co., Ltd. (hereinafter referred to as “Science Park Property”). Science Park Property ranked 28th in Guangdong Province's comprehensive property service strength ranking in 2018, ranked 18th in Shenzhen's comprehensive property service strength ranking in 2018, and has more than 20 years of experience in planning, operation and management of high-tech industrial parks. It is expected that the merger of Science Park properties into the company will have a very significant synergy effect. The company's main business is building decoration, which is naturally closely linked to the property. In the future, emphasis will be placed on “micro-renewal” in the renovation of the old city. The company needs the entrance of the property to enter this blue ocean market. Science Park Property is located in Shenzhen with the company. The announcement shows that it had 2018 revenue of 498 million yuan, net profit of 11.88 million yuan, and a net interest rate of 11.88 million; while SEG Property, which the company participated in shares, had revenue of 249 million yuan and net profit of 25.89 million in 2019, which is expected to gradually increase the profit level of Science Park properties through the company's management and profit promises. The profit promise of the merger and acquisition company corresponds to PE 13.4 times in 2020. Reasonable consideration can increase EPS Jiazete's 100% equity estimate to be 173 million yuan. Its profit commitment requires Science Park properties to achieve net profit of no less than 25 million yuan, 28 million yuan, and 31 million yuan in 2020-2022, corresponding to Jiazete's net profit to mother of not less than 12.91 million yuan, 14.46 million yuan, and 16.01 million yuan in 2020-2022. Corresponding PE in 2020 is 13.4 times. Currently, similar A-share companies, China Airlines Shanda and Nandu Property have agreed PE expectations of 22.4 and 17.6 times; Hong Kong Stock Country Garden Properties and Greentown Services have agreed PE expectations of 31.1 and 26.5 times in 2020; the company's consistent expectations for 2020 are 16.3 times. We believe that if this merger and acquisition is successfully implemented, the financial considerations will be relatively affordable and can increase the company's EPS. In the future, it is not ruled out that the company's continued deep cultivation and integration in the property sector was announced that “within 12 months after the completion of this acquisition, the listed company will commence the acquisition of the remaining minority shares of the Science Park Property Company in accordance with the current evaluation price and transaction method”; the company will also raise supporting capital to pay cash consideration, supplementary working capital, and debt repayment in the merger and acquisition transaction; the company already participated in 25% of SEG Property's shares in 2017, and it is not ruled out that it will continue to increase its shares in the future. Investment proposal If this merger and acquisition is successfully implemented, the company's property layout will be further advanced. The epitaxial acquisition conforms to the company's interests and can enhance the company's EPS; through strong alliances with science and technology park properties, the company's main decoration business will also have a positive impact. The company's main business is currently growing rapidly, there are enough orders on hand, and future performance can be expected to continue to grow rapidly. Maintain the company's 2019-2021 EPS of 0.39, 0.51, and 0.63 yuan/share, and maintain the company's “buy” rating and target price of 11.7 yuan. Risk warning: There is still some uncertainty about whether this acquisition will be successfully implemented; the performance completion of the M&A company falls short of expectations; the continued decline in the growth rate of fixed asset investment affects the company's main business acceptance.