The path of transformation has gradually become clear, and leading Internet users have made every effort to enter cloud computing. Huaxing Venture is a leading enterprise in the domestic communication network technology service industry. Its business scope covers the three segments of network construction, network maintenance, and network optimization. Due to the low technical barriers in the network service industry, it is difficult to form a differentiated competitive advantage, limiting the pace of further expansion and strengthening of the company. In the early stages, the company tried to enter other fields many times, including intending to acquire public information and enter the local network, and laying out the IDC cloud computing field through industrial funds, etc., but it did not form a clear transformation idea. However, since the progress of the public information fiber-to-the-home project did not meet expectations, the company decided to end its acquisition and began the process of buying Internet Harbor in cash almost simultaneously, which instead made the otherwise vague transformation path of Huaxing Venture clear. Cloud computing will become the focus of the company's future development: using SD-WAN to create differentiated domestic hybrid cloud services: Internet Harbor and domestic SDN startups - Dahe collaborated to create the first wide-area DCI network based on SDN technology in China, creating a stable, flexible and flexible SDN- for IDC/hybrid cloud users DCI Network establishes differentiated hybrid cloud services for end users. Industry trends: The hybrid cloud market is expected to dominate in the future, and DCI networks may become the backbone of the next generation. The continuous explosive growth of data traffic in recent years has driven the rapid expansion of the IDC market, and the trend of shifting data traffic from traditional data centers to cloud data centers has forced traditional IDC service providers to upgrade to cloud service providers. Since hybrid clouds combine the comprehensive advantages of public and private clouds, hybrid clouds are expected to dominate the entire cloud computing market in the future. At the same time, the rapid growth of IDC exchange traffic makes it difficult for the backbone network to bear pressure. By building a DCI (Data Center Interconnection) network, diverting IDC exchange traffic is an effective way to solve this problem. The DCI network is expected to form the next generation backbone network along with the traditional backbone network, and the utilization efficiency of the overall network will be significantly improved. Connected harbor: “IDC+DCI+SDN” seizes the hybrid cloud market and builds a hybrid cloud ecosystem through horizontal integration. Based on a precise judgment on the development trend of the industry, Internet Port has expanded the scale of IDC while establishing DCI-SDN networks in northern Guangzhou. At the same time, Internet Port has also joined hands with Pinkaoyun to launch an industry-leading hybrid cloud system to help customers quickly build IT systems that meet their own rapid development and stable operation. Furthermore, the demand for informatization upgrades in traditional industries has brought an excellent opportunity for the Internet port to enter the vertical field. In the next two years, Internet Harbor will seek integrators that are deeply involved in industry segments as partners to jointly help traditional enterprises achieve their demands for informatization through a cooperative model, and build a hybrid cloud ecosystem covering multiple vertical segments based on existing platforms. Profit forecast and investment recommendations: The target price for 6 months is 16.33 yuan, covering the “buy” rating for the first time. We expect the company's net profit for exam preparation from 2016 to 2018 to be 82 million yuan, 140 million yuan and 182 million yuan, respectively, and the corresponding diluted EPS of 0.192 yuan, 0.326 yuan and 0.424 yuan respectively. Considering that the DCI-SDN network established by the company has scarce technical advantages, we gave the company a certain valuation premium. In 2017, 50xPE had a target market value of 7.0 billion yuan and a corresponding target price of 16.33 yuan, which covered the “buy” rating for the first time. Risk warning: 1) Performance growth falls short of expectations; 2) Target company's profit falls short of expectations