At the end of May of the incident, the company issued an announcement to issue shares and pay cash to purchase assets and raise supporting capital and related transaction plans. The company plans to issue shares and pay cash to the Zhuhai Municipal State-owned Assets Administration Commission and Urban Construction Group to purchase 100% of its shares in the Zhuhai Duty Free Group. At the same time, it is planned to raise supporting capital from GM Investment's non-public shares, a subsidiary of China General Technology (Group) Holding Co., Ltd. The total amount raised is expected to be no more than 800 million yuan, and not more than 100% of the share transaction price for the shares issued by the company to purchase the shares of the Zhuhai Duty Free Group. It is estimated that the number of shares to be issued will not exceed 186 million shares, not more than 30% of the total share capital before the transaction. It is proposed to introduce China GM as a battle investment. A brief review of the company entering the duty-free business and obtaining scarce license resources The domestic duty-free operating license is a relatively scarce license resource. Currently, it only includes China Exemption, Japan, China Exemption, China Exemption, Exemption, and Shenzhen Exemption. The overall competitive pattern is relatively stable, and the license dividend effect is strong. This time, the company's wholly-owned acquisition of ZhuBu is equivalent to obtaining a duty-free operating license and related beneficiary rights, and entering the duty-free market. As far as tax exemption in Zhuhai is concerned, if the acquisition is completed, it is equivalent to the duty-free business being listed. Currently, the capital market is only owned by China National Travel Service and has duty-free license resources, and China National Travel's control includes China Exemption, Japan, and Overseas Exemption. It is rich in license resources, and also has a huge market share advantage. After the duty-free listing of Zhuhai, it is expected that it will still gain a stable income volume and profitability, and gain a certain valuation advantage through license barriers, with its own high quality and scarce license. Established duty-free operator, benefiting from the expansion of the duty-free market in the new era, Zhuhai Duty Free Group was founded in 1980. It is a group enterprise with port duty-free franchise services as the lead, integrating department store retail, commercial property management, domestic and foreign trade, warehousing and logistics, cross-border e-commerce and hotel management. The Group developed from initially operating a single duty-free product at the port to the only state-owned enterprise in China with practical experience in the operation and management of the three major tax-free, tax-free, and bonded (cross-border) businesses. At the same time, the Group further promoted the two-wheel driving force of combining the duty-free industry with modern commerce. Currently, Zhuhai Duty Free has Gongbei Port, Hengqin Port, Kyushu Port, Hong Kong-Zhuhai-Macao Bridge Pearl Port Duty-free Shop, and Tianjin Binhai Airport Arrival Store. The Gongbei Port Duty Free Shop is the largest land port duty-free shop in Asia. The company also owns the Zhuhai Jida Duty Free Shopping Mall and Guomao Shopping Plaza in downtown Zhuhai to obtain income such as rent. As a regional duty-free shop in the past, Zhufen had relatively rich resources for duty-free shops. The “Interim Measures on the Administration of Outbound Duty Free Shops” issued in July 2019 mentions that “for enterprises with duty-free business qualifications approved by the State Council and that have continuously operated ports or inbound and outbound duty-free shops in the city for the past 5 years, let go of geographical and category restrictions on the operation of duty-free shops, and allow enterprises to bid equally for port exit duty-free shop management rights.” In fact, it actually provides policy guarantees for the future participation of regional duty-free shops at airports and ports nationwide. Previously, duty-free shops in Zhuhai had already obtained entry port and exit duty-free shops Go to the entry point at Tianjin Binhai Airport and wait at the domestic airport port in the future As the market ushered in a new round of bidding, operators such as Zhuhai Duty Free have the ability to expand their own business. Judging from the current development of the domestic duty-free market, the country regards duty-free channels as an important trigger for the return of consumption, and tax exemptions are of great strategic importance. The recently introduced Hainan Free Trade Port Plan also uses the outlying islands duty-free channel as a key channel for future duty-free development, giving greater policy strength. At the end of 2019, the size of China's duty-free market exceeded 50 billion yuan. According to relevant forecasts, by 2025, the total size of China's duty-free market will reach 160-170 billion yuan. The domestic duty-free market still has a lot of room for growth in the future, and the duty-free market in Zhuhai will also benefit deeply from the expansion of the duty-free market and the improvement of channels. The tax exemption in Zhuhai has brought about a significant increase in performance. The company's main business, Stable Development Company, is a group strategic enterprise integrating the real estate industry, port economy industry, marine economy industry, modern service industry, and modern finance industry. In 2019, it achieved operating income of 4.193 billion yuan, an increase of 36.19% over the previous year, and realized net profit of 526 million yuan, an increase of 2.66% over the previous year. The net profit situation has remained stable in recent years. Revenue in 2019 achieved a significant growth rate. Revenue during the reporting period mainly came from the real estate and marine economy industries. The real estate industry achieved operating income of 2,347 billion yuan, and the marine economy industry achieved operating income of 2,347 billion yuan, and the marine economy industry of 1,656 billion yuan. However, in 2019, Zhuben's revenue is estimated to be about 2.7 billion yuan, and net profit is about 800-900 million yuan. Compared with the company's current performance, the increase is quite large, which has a strong effect on boosting the company's overall market value increase. At the same time, the duty-free industry itself has a higher valuation center compared to the track where the company was originally located, and after asset injection, it also has a strong effect on improving the company's reasonable valuation. Risk warning: The progress of asset purchases did not meet expectations; Zhubei's business development fell short of expectations; the company's original business development fell short of expectations, etc.