Investment summary: Incident: On November 20, Hopeful Tourism Limited, a subsidiary of Caesar Group, and JD Investment HK, JD Investment BVI completed the transaction of 78.06 million Class A common shares of Tuniu (including 12.43 million directly held shares and 65.62 million Tuniu Class A common shares indirectly). After the settlement was completed, Caesar's total shareholding ratio in Tuniu reached 21.1%, making it Tuniu's second-largest shareholder. In recent years, Tuniu has continued to deepen cooperation and exchanges with Hainan, while continuing to innovate and optimize products and services for Hainan. These include: 1) In mid-September, Tuniu launched its flagship travel store in Hainan; 2) Tuniu digs deep into Hainan as an alternative product for overseas destinations, such as: research tourism and health tourism products; 3) developing innovative island tours and vigorously developing in-depth and customized tours; 4) developing new products with distinctive features to fill the supply gap for recreational and holiday travel products, such as newly established duty-free shops and theme parks. Tuniu will also make full use of Hainan's geographical and policy advantages to enable Hainan to function as a global hub. Including: building strong hubs. Tuniu will provide packaged products and services for travel, vacation, cruises, duty-free and other destinations in Hainan for visitors from all over the country that land in Hainan and transit through the Hainan hub. A network that guides the flow of passengers. Through the Tuniu national sales network, domestic passenger flows such as group tours, free travel, self-driving, air tickets, hotels, etc. and more overseas customers have been introduced to Hainan. Promote “tourism+” and “park+tourism” exploration. Through this share transaction, the tripartite cooperation will be further deepened and the advantages of the three parties will be fully integrated: JD has leading capabilities in the fields of retail, digital technology, logistics and warehousing, and technical services. a. Advantages of Tuniu online and domestic markets. b. Strategy for restructuring the Tuniu outbound travel model. c. Avoid losses caused by a price war between Caesar and Tuniu due to partial business overlap. Caesar has a leading edge in the offline and overseas travel markets, and is also cooperating with China Shipping to set up a duty-free business. With the completion of this share settlement, Caesar can further mobilize the superior resources of the three parties, strengthen online and offline business linkages, and promote tripartite cooperation in tourism resource integration, business collaboration, innovative business, and financial business, which will have long-term benefits for the development of multiple business formats, mainly tourism and duty-free businesses. Investment advice: The company's revenue growth in 2020-2022 is expected to be -74.6%, 225.9%, and 63.2% year-on-year. Earnings per share were -$0.28, $0.51, and $0.93. The 2021-2022 PE was 26x and 14x. We gave the company a 2021 PE of 39-46 times, a reasonable share price range of 19.68-23.62 yuan, and gave it a “buy” rating. Risk warning: macroeconomic downside risk; uncertainty about the development of the epidemic; the recovery of the tourism industry falls short of expectations; profits from the duty-free business fall short of expectations.