On January 5, the company issued an announcement stating that Shanghai Hengrun Culture Group Co., Ltd. will change its overall name to “Shanghai Hengrun Digital Technology Group Co., Ltd.” Before and after the completion of this overall change, Lingnan Co., Ltd. will hold 90.03% of Hengrun Group's shares, while the remaining 9.97% of the shares will be held by Hefei Zeheng Enterprise Management Consulting Partnership (limited partnership), etc. Comment: 1. Hengrun Technology is the most important part of the company's three main businesses in the Chinese travel sector. It is a high-end equipment and system integration service provider for cultural tourism-themed projects, focusing on the R&D, design, production and integration of immersive amusement equipment systems. The main products include indoor and outdoor high-tech interactive experience equipment such as flying domes, track rides, cinemas, etc. In fact, it is the main provider of AR/VR content and equipment. Hengrun Technology's net profit reached 130 million yuan in 2018, ranking in the top three in its industry. We expect Hengrun's net profit to reach more than 150 million yuan in 2019. Judging from the company's current development trend, steady growth in future performance is worth looking forward to. 2. Hengrun Technology's spin-off and listing comes at an opportune time, which is expected to raise the company's valuation level. Judging from now on, all the conditions for the company's spin-off and listing of Hengrun have basically been met. Currently, the reform of its shareholding system can be seen as the official start of its spin-off and listing process. Judging from the valuation perspective, whether Hengrun will go on the GEM or the Science and Technology Innovation Board in the future, it will have a good effect on improving PE which is only 15 times that of the current (2020). 3. Looking at traditional industries, considering the continued advancement of real estate deregulation policies, we believe that the valuation of the company's traditional garden and water services business will also be repaired. 4. We expect the company's revenue in 2019, 2020 and 2021 to be 7.979 billion yuan, 8.689 billion yuan and 9.830 billion yuan respectively, up -10%, 9%, and 13% year on year. Net profit to mother will be 450 million yuan, 538 million yuan and 623 million yuan respectively, up -42%, 19% and 16% year on year. For the first time, the company was given a “buy” rating. 5. Risk warning: The spin-off progress falls short of expectations, performance falls short of expectations, systemic risk.