Key investment points: Divestment of the machinery business and evolve into a pure education enterprise. The company announced that the listed company plans to transfer 100% of the shares held by Dalian Third Base Technology Co., Ltd. to Mr. Yu Jianmo and Mr. Jin Bingduo at a price of RMB 249 million. After the transfer is completed, the company will no longer hold shares in Third Base Technology. The main machinery business of the former listed company of Sanli Technology's business was the development of precision molding technology and the manufacture of its equipment; mold design, development, and manufacture of its equipment; and the manufacture of CNC machine tools, special machine tools, and machine tool accessories. The divestment of Third Base Technology marks the evolution of a listed company into a listed company whose main business is education. It is also the only early education company listed in the capital market. The impact on the net profit of listed companies is about 20 million yuan. In 2019, Third Base Technology had total assets of 350 million yuan, revenue of 130 million, and net profit of 1.84 million; 2020Q1 achieved revenue of 11.66 million and losses of 1.93 million. The company's machinery business has remained stable, and the net profit scale has been around 20 million. This year, affected by the epidemic, there have been some fluctuations. We believe that the placement of machinery business will reduce net profit in terms of reports, but it will make the business of listed companies more pure, which is conducive to raising valuations. Megim Early Education actively resumed work and resumed classes. As of the first half of the year, 350 early education stores under the company have resumed classes, and some key areas are still closed. At the same time, the company is actively promoting services such as free online courses and online art classes, but it is still unable to make up for offline services. Course sales and revenue recognition are expected to return to normal levels in the second half of the year. We believe that the industry is facing a huge reshuffle. Small early education brands will withdraw from the market due to cash flow pressure, freeing up space for the company's long-term development, and the concentration of the industry is expected to increase further. Adjust profit forecasts and maintain an increase in holdings rating. The adjusted profit forecast was mainly due to the machinery business, and the revenue and net profit of Third Base Technology were deducted from the consolidated statement. The early childhood education and study abroad business continued to maintain the original forecast. We have lowered our profit forecast. We expect the company's net profit for the period 20-22 to be 42 million, 140 million, and 173 million (previously 61 million, 159 million, and 191 million), respectively, and the corresponding valuations are 158X, 46X, 38X. Although the volume of profit has decreased, we believe that the divestment of the machinery business will benefit the company's future development and stock price, so it has maintained an increase in holdings rating.