The company transferred 29.99% of its shares, and the actual controller became the Jingdezhen State-owned Assets Administration Commission. The transfer price was 50% premium compared to before the suspension of trading. The company initially focused on storage shelves and was the top three mainstream enterprises in the industry. In recent years, the transformation to a system integrator has had outstanding results, and revenue performance has been steadily improving. It is an enterprise with a certain degree of knowhow and bargaining power and excellent risk control in the industry. We believe that this equity transfer will help the company rapidly expand its business and accelerate its differentiation from industry competition. It is predicted that the company's net profit from 19-21 will be 103 million, 142 million, and 201 million, corresponding to the PE valuation 27/19/14 times, giving it a “Prudent Recommendation - A” rating. Equity transfer incident: The controlling shareholder of the company, Shenghe Investment and the co-actor, Shanghai Beiyu, signed a “Share Transfer Intent Agreement” with Jingdezhen Ceramics Cultural Tourism Development Co., Ltd. (Tao Cultural Tourism Group for short), and transferred a total of 29.99% of shares (20.64% +9.35%) through agreement transfers. After the transfer, Shenghe Investment still held 23.51% of the total share capital of the listed company. Shanghai Beiyi no longer holds shares, and Tao Cultural Tourism Group became the controlling shareholder. The actual controller will be changed from Mr. Jin Yueyue to a member of the Jingdezhen State-owned Assets Supervision and Administration Committee. The latter holds 86.99% of Tao Cultural Tourism Group's shares. The transfer price was $1,239 million, corresponding to the price per share of $13.74, a 50% premium over the suspended price of $9.15. The management team remained essentially unchanged after the transaction. Tao Cultural Tourism Group has the right to nominate 5 out of 7 directors, including recommending the candidate for financial director. We expect the new shareholders to give priority to maintaining the stability of the original management. We expect that the collaboration between the two parties will bring more room for business development for Infly Storage. Specifically, it is reflected in the following aspects: 1) As a mainstream intelligent warehousing equipment and integrator in China, the company's business will extend to downstream logistics warehousing services, focusing on cold chain warehousing and logistics for agricultural products, intelligent warehousing for ceramic e-commerce, etc. These are all supporting projects for tea gardens and ceramic e-commerce under Tao Cultural Tourism Group, with clear requirements; 2) By meeting the needs of actual controllers for modernization and intelligent construction of the ceramic manufacturing industry in the Jingdezhen region, seeking more orders for construction and operation and maintenance projects; 3) Tao Cultural Tourism Group's vocational education and training module will provide more high-quality logistics technology to the industry and logistics industry Talent; 4 ) The shareholder background of the local State-owned Assets Administration Commission will help the company develop new customers, especially considering that some downstream segments of logistics and warehousing are relatively closed, and often require more resources to endorse them. In the early days, Yinfei Storage focused on shelves and was the top three mainstream enterprises in the shelf industry. Downstream customers covered the automotive, petrochemical, and power communication fields. Since then, through independent research and development of transportation equipment such as shuttles and AGVs, etc., the three-dimensional warehouses have been supported, driving rapid growth in performance, and expanding customers in e-commerce, food, cold chain, household goods, ceramics, etc. The company's development strategy is “shelves (core business) +automation system integration (strategic business) +warehousing operation services (emerging business)”. The company's revenue performance has been improving steadily. Revenue for 2016-18 was 490 million, 599 million, and 689 million, and revenue for the first three quarters of '19 was 501 million. The year-on-year growth rates were 5.6%, 22.2%, 15.1%, and 4.1%, respectively. Net profit of 82 million, 83 million, and 93 million yuan was realized. 193 was 72 million, with growth rates of 20.5%, 1.8%, 11.1%, and 0.5%. If we consider the long delivery cycle of the logistics and warehousing business, there will be some seasonal volatility in revenue recognition. The compound revenue growth rate in the past five years was 9.8%, demonstrating the company's ability to steadily expand its business. The operation is steady and steady, and the profitability and cash flow are superior to those of its peers. In 16-18, the company's gross margin was 37.7%, 32.5%, and 32.7%, respectively. Historically, it has basically fluctuated slightly around 33%. Net interest rates were 16.7%, 13.9%, and 13.4%, respectively, and profitability was higher than that of peers. The proportion of sales expenses in the three fees is relatively high. They have remained between 12 and 13% for the past three years. Since logistics automation covers a wide range of downstream fields, investing more in sales expenses is necessary for customer expansion. Looking at the balance sheet, the company has abundant cash reserves, and monetary capital accounts for more than 20% of assets in the annual report; current ratios of 3.35, 3.21, and 3.15 in the past three years; receivables turnover ratios of 2.86, 3.35, 3.08, and inventory turnover ratios of 2.58, 2.49, and 1.94. Although revenue recognition has seasonal cycles, net operating cash flow at the end of each year is positive. It is an enterprise with a certain degree of knowhow and bargaining power, and excellent risk control in the industry. The share of the company's system integration business has increased rapidly, and successful transformation is a reflection of comprehensive competitiveness. In the logistics automation industry chain, it is in the system integration process that best reflects the comprehensive strength of an enterprise. Benchmarking outstanding overseas logistics automation giants such as Daifuku and Shengfiel, etc., all have strong integration capabilities and are positioned as logistics system integrators. They have a complete range of products, strong bargaining power, and profit margins. System integrators must not only have targeted logistics system planning and design plans, but also master relevant industry knowledge, key technology, and key equipment to achieve a high degree of software and hardware coordination. System integration technology and key equipment performance will directly have a decisive impact on the construction of automated logistics system projects. The automated warehousing integration business of Yinfei Storage grew rapidly from 111 million in 2016 to 347 million in 2018, with a compound growth rate of 77% and a revenue share increasing from 22.7% to 50.4%. It is one of the representative enterprises of domestic equipment companies that have successfully transformed into system integrators. The company recently announced that it has become Tesla's global procurement supplier to carry out high-ranking shelf supply cooperation for projects such as the Gigafactory. Although only 380,000 small-batch contracts for the Shanghai factory have been confirmed so far, we believe that the company's ability to pass certification and enter Tesla's global supply chain itself represents the recognition of the company's products and technical capabilities by leading downstream customers. As Tesla expands production, it is expected to bring in more orders, which is worth looking forward to. In addition, the company began repurchasing in July '19, with a total planned amount of between 0.5 and 100 million dollars to implement equity incentives and issue convertible bonds. As of February 29, 2020, a total of $37 million was repurchased, accounting for 1.68% of the total share capital, reflecting the company's confidence in future development and the importance it attaches to long-term incentives. Considering the company's steady development capabilities in history and its relative leading position as a shelf integrator, this equity transfer will help the company rapidly expand its business and accelerate its becoming a better logistics automation equipment integrator. We forecast that the company's net profit for 19-21 was 103 million, 142 million, and 201 million dollars, corresponding to PE valuation 27/19/14 times, giving it a prudent recommendation rating. Risk warning: 1) Competitor bids are depressing prices, and the competitive landscape of the industry worsens; 2) Downstream customers' willingness to spend capital expenses has declined, and new business development falls short of expectations; 3) Fluctuations in upstream raw material costs have an impact on profitability