Investment highlights: Take a substantial step in mixed ownership reform. In early April 2014, Hunan Province issued “Opinions on Further Deepening the Reform of State-owned Enterprises”, which proposed further deepening the reform of state-owned enterprises. In order to respond to the call for reform of state-owned enterprises, improve the balance and liability structure, optimize the current layout of the hotel industry, and speed up the construction of the Zhangjiajie project, in November 2015, the company completed a fixed increase to Huaxin Hengyuan - Huaxin Hengyuan, a cash subscription of 1,653 million yuan for the company's 300 million common shares at a price of 5.51 yuan/share. After the fixed increase was completed, Huaxin Hengyuan became the company's second largest shareholder, holding 29.44% of the shares. Through this non-public stock offering, the company is actively promoting mixed ownership reform, allowing private capital to make full use of market-based operating mechanisms and management methods, and further improving the company's operating efficiency and market competitiveness. Test the waters of the old-age care industry with hotels as a basis. Along with the slowdown in the global economy and changes in the domestic market, 2015 can be described as a year of boom in the Chinese hotel industry. Hot topics such as the new normal of hotels, mergers and acquisitions, Internet+, strategic alliances, cross-border cooperation, sharing economy, and hotel asset securitization have become hot topics of concern and discussion in the industry. In this development environment, the company is stepping up the pace of change. In November 2015, the company established a wholly-owned subsidiary, Huatian Health Care Company, with a registered capital of 10 million yuan, to make full use of the advantages of hotel chains, explore the profit space of existing hotel assets (mainly guest rooms), replicate and promote in various hotel chains, and gradually increase investment in the pension industry while improving current hotel business performance. Follow the management model of hotel chains and build a chain nursing care industry. Diversified development has brought about performance growth and given a rating of “increased holdings”. The company will continue to stick to hotel services as its main business in the future. Currently, the industry has experienced the harshest cliff-style decline in 30 years, and the competitive pressure from international brands is very high in the middle and high-end hotel market. On the one hand, the company tried an asset-light operation model to obtain revenue through entrustment management after selling its own assets; on the other hand, it revitalized the guest room stock, actively explored the effective integration of traditional industries and the Internet by testing the water for old-age care services, and established a handle network with the six major hotel group alliances to engage in the hotel public direct sales platform business. As the hotel industry recovers, the company's structure becomes more market-based, the company's asset-light operating model continues, the pension industry tests the waters, and the hotel public marketing platform is implemented, the company's performance will grow steadily. For the first time coverage, we expect the EPS for 2015-2017 to be 0.04, 0.07, and 0.08 yuan/share, corresponding PE to 186, 106, and 93 times, and the target price of 13.14 yuan/share, giving it an “increase in holdings” rating.