Incident: On the evening of 3/4, Tianchuang Fashion revealed that Gao Chuang, the majority shareholder of the transferee company of Visions Holding (HK) Limited, still saw a total of 5% of the company's shares at a transfer price of 8.64 yuan/share (3/3 closing price 9.68 yuan/share, 11% discount). There are no plans to increase or decrease its holdings for the next 12 months. Visions Holding (HK) Limited is a wholly-owned subsidiary of Beigaofeng Capital. Its sole director, Min Wanli, was Alibaba Cloud's chief scientist and an authoritative expert in the field of AI. Main business development review: Fashion women's shoe leader, 100% acquired Kid Technology in December 2017 and entered the field of accurate internet marketing. Let's take a look at its two businesses: 1. Traditional fashion women's shoes business: excellent craftsmanship, leading the industry in efficiency. Tianchuang Fashion's traditional main business is the design, manufacture (60% of its own production capacity) and sales business. Its brands include KISSCAT (main brand, focusing on comfortable commuting, accounting for 60% of revenue, 970 offline stores as of 19Q3), Tigrisso (focusing on elegant style, 413 stores), Kiss Kitty (girls' brand, 179 stores), and ZsaZsaZsu (focusing on fashion style, 135 stores). In recent years, the fashion women's footwear industry has been affected by 1) poor retail sales; 2) sneaker market crowding; 3) declining traffic from major channels such as department stores, etc., and the overall performance of the industry has been poor. As a leader, Tianchuang Fashion's performance is much stronger than its peers, but the main footwear business performance is still declining. Looking at the first half of 2019, revenue was 870 million yuan (-0.9%), and net profit was 67 million yuan (-26.9%); in the future, it will actively develop new retail businesses while continuing to improve the quality of offline channels. 2. Kid Tech: Internet marketing leader, involved in MCN business acquisition in '19:2017/11/30, Tianchuang Fashion acquired 100% of Xiaozi Technology's shares for 888 million yuan, of which 364 million was paid in cash and $514 million was paid to the core shareholders and founder team of Xiaozi Technology (collectively from Baidu) at a price of 14.37 yuan/share. Performance commitment and completion status: Xiaozi Technology officially merged in December '17. The acquisition performance promise was that net profit deducted from non-return to mother in 17/18/19 reached 65 million yuan/84.5 million/109.85 billion yuan. In reality, revenue for 17/18 reached 232/304 million yuan, and net profit to mother reached 66.8 million yuan/100.31 million yuan, exceeding the performance promise. The latest development direction: In addition to continuing to consolidate traditional traffic distribution business (application promotion, programmatic promotion), Xiaozi Technology's new actions in recent years include: 1) Starting social media marketing at the end of '18: Cooperate with local TV stations and copyright companies to cut and operate their copyrighted long video content into short videos, broadcast them on short video platforms, share advertisements with short video platforms, and then share them with copyright parties; in '19, this business has taken the lead. Currently, partners include Zhejiang TV, Oriental TV, Liaoning TV, Shandong TV, Golden Eagle TV, Fujian, Hebei TV, Video sites such as Youku, copyright company Pentium, etc.; they have been discussing cooperation with Korean TV stations (Hyundai TV, etc.) for 20 years, and will try to introduce content from Hong Kong, Macao, Taiwan, and overseas in the future. 2) Integration of Tianchuang's business: In 2020, it began participating in the launch of Tianchuang's new retail platform. 3) E-commerce MCN: Starting in '20, I tried to be an overseas MCN first, starting with the MCN of Little B. VC, the former chief scientist of Alibaba Cloud, took a stake, which is expected to help digital development. Visions Holding (HK) Limited, which has invested 5% of Tianchuang, is a wholly-owned subsidiary of Beigaofeng Capital. The sole director, Mr. Min Wanli, worked for IBM and Google, joined Alibaba in 2013 and was responsible for commercialization and commercialization of big data technology. He led the data team to support cost-effective data operations using models to help gather and calculate products and recommendations, and reduce the degree of dependence on the experience of the second generation of store students. After joining Alibaba Cloud in 2015, it began incubating the innovation and implementation of big data in vertical fields such as transportation. He built vertical AI systems such as ET Urban Brain, ET Industrial Brain, ET Agricultural Brain, etc., until June 19, when he left Alibaba Cloud as Alibaba Cloud's chief scientist to establish Beigaofeng Capital. He hoped to use the power of industrial capital and his own AI practice experience to provide long-term capital for outstanding Chinese enterprises in industrial transformation and consumption upgrading, and stimulate their growth potential through digital transformation. The design experience and complete supply chain system that Tianchuang has accumulated in the field of footwear also allowed Beigaofeng Capital to see the potential for business digitalization and new retail upgrades. Profit forecast and investment suggestions: The company's main footwear industry was still under pressure offline in '19, and although there was some growth online, the profit side is expected to decline throughout the year; in 2020, despite the impact of the epidemic, the main footwear industry had a low base in 19Q1 (19Q1 footwear net profit fell 73%). As a result, the main footwear industry is expected to perform at the same time. At the same time, Xiaozi Technology ended the performance commitment period. Due to new business development, the profit scale is expected to remain flat compared to 19. We expect the company's net profit to be increased by -8.8%/0.28%/12.14% in 19/20/21 to 2.21/248 billion yuan, with a market value of 5 billion yuan by 3/4 closing, corresponding to PE23/23/20X. Consider the business development prospects of Xiaozi Technology and the contribution that new shareholders may bring to the development of new retail in the original main business after entering the market, and maintain a “buy” rating. Risk warning: The impact of the pandemic exceeded expectations; MCN's upfront investment in new business exceeded expectations