The company announced in the incident that it and Guangdong Hongchuan Group jointly initiated the establishment of a domestic commercial factoring company, Hongtong Commercial Factoring, in Tianjin's Binhai New Area, with a registered capital of 500 million yuan, of which Dongguan Holdings invested 475 million yuan and held 95% of the shares. The general manager of Hongtong Commercial Factoring was recommended by Dongguan Holdings, and 4 of the 5 directors were also recommended by Dongguan Holdings. Commercial factoring is an important trade financing tool in supply chain finance. It mainly provides enterprises with services such as accounts receivable transfer, payment and settlement. Establishing commercial factoring and collaborating with internal resources using shareholder resources, Hongtong Commercial Factoring will carry out factoring business with Dongguan Holdings around the supply chain of road and bridge engineering receivables and warehousing enterprises, and carry out supply chain factoring business with Hongchuan Group around its core warehousing enterprises, which can not only effectively guarantee the development of factoring business, but also achieve coordination and integration of internal resources to improve the overall operating efficiency of the group. Hongtong Factoring can also achieve resource sharing, cross-marketing, and collaborative development with Rongtong Leasing in terms of customer resources, marketing, risk control, etc., to improve the yield and market competitiveness of the financial leasing business, and reduce the liquidity risk of the financial leasing business. Expanding business areas and accelerating the steady development of the financial layout company's main road and bridge toll business is the company's main source of profit and provides continuous cash flow for financial transformation. Rongtong Leasing, a wholly-owned subsidiary of the company, is increasing its market development efforts and maintaining close cooperative relationships with affiliated companies, which is an important profit growth point for the company. The company is also participating in financial enterprises such as Dongguan Securities, Dongguan Trust, Chang'an Village Bank, and Songshan Lake Small Loan Company, and is gradually developing into diversified finance. The company is now involved in commercial factoring business. Under the guidance of the “double drive between industry and finance” strategy, the company is enriching and deepening the field of financial investment, which can provide customers with more comprehensive financial service products, enhance the overall competitiveness of the company's financial business, and further enhance the stability and profitability of the company's operations. Fixed increases to capital. National reform strongly expects that the company plans to increase Rongtong Leasing by no more than 1.4 billion yuan through a non-public offering. After the fixed increase is completed, the registered capital of Rongtong Leasing will increase by more than 1 times. The plan has already passed and is yet to be officially approved. It is expected that performance will increase after the fixed increase is completed in 2017. The employee stock ownership plan, which is one of the targets of the fixed increase, is locked in for 3 years, which will harmonize the interests of employees and the company and effectively stimulate employees' enthusiasm. Dongguan Securities, in which the company is a shareholder, is in the IPO queue, and it is expected that it will bring considerable investment returns after listing. As the only listing platform under the Dongguan State-owned Assets Administration Commission, benefiting from the acceleration of state-owned enterprise reform, the company is expected to transform into a local financial control platform in the future, and is likely to undertake the collaborative development of industry and finance under the Dongguan State-owned Assets Administration Commission. We are optimistic about the development prospects and maintain the “increase in holdings” rating. We are optimistic about the development prospects of the company's transformation finance. The establishment of a commercial factoring company this time will promote the integration of the company's internal resources, improve operational efficiency, and further accelerate the financial layout. The imminent implementation of the non-public offering will greatly boost the leasing business, and the acceleration of state-owned enterprise reform is expected to drive transformation and upgrading. We expect EPS in 2016-18 to be 0.6, 0.73, and 0.94 yuan, respectively, corresponding to PE 17X, 14X, and 11X. The target price range is 11.58 to 13.49 yuan, maintaining an “incremental” rating. Risk warning: The fixed increase process falls short of expectations, the national reform process falls short of expectations, the Dongguan Securities IPO process falls short of expectations, and there is a risk of market fluctuations.