Investment Highlights: Company Announcement/News: Henderson Daxin announced the acquisition of 70% of Jin Tengxing's shares. Transaction overview: The company plans to invest RMB 26.5 million to acquire 70% of Jin Tengxing's shares through self-financing or other means. (1) Financial conditions: The acquisition target of Jin Tengxing had total assets of RMB 16.3545 million at the end of 2013, total liabilities of RMB 35,000, net assets of RMB 16.319,500, and no main business income. Net profit for 2013 was -2,7914 million yuan. (2) Projects and assets: Jin Tengxing obtained an investment project registration certificate issued by the Hubei Development and Reform Commission in October 2013, and plans to invest 150 million yuan to build warehouses and related facilities on 170 acres of land. Currently, the project requires approval from the Ministry of Land and Resources. It is currently in the land title processing stage, and construction has not yet started. (3) Performance commitment: The construction project promises to be put into trial operation within 12 months after obtaining relevant qualifications, and the equity transferor promises that the average return on investment within three years of the warehousing project is officially put into operation is not less than 10%. Expanding acquisition projects will help the company expand its business network, and if performance promises are fulfilled, it will help increase the company's ROE. (1) Through the acquisition of 70% of Jin Tengxing's shares, the company actually controls Jin Tengxing and expands the company's market and business outlets in the central China regional center and the middle reaches of the Yangtze River through the warehousing project that Jin Tengxing plans to build. At the same time, through the further expansion of the company's main projects under this project, storage services for solid chemicals and other petrochemical varieties have been added. (2) The performance promise mentioned in the acquisition agreement is an average return on investment of 10% within three years of commencement of production, refund of all investment if the standards are not met, and the difference in return on investment is measured at 10%; this return is significantly higher than the company's current ROIC (we estimate 5.8%) and ROE (we estimate 5.7%). Achieving performance standards will significantly improve the company's profitability. Maintain the 2014-2016 profit forecast and “increase in holdings” rating. As this acquisition has yet to be approved by the board of directors, we will not adjust our profit forecast for the time being. We expect profit forecasts for 2014-2016 to be 54 million yuan, 65 million yuan, and 67 million yuan, corresponding to fully diluted EPS of 0.45 yuan, 0.54 yuan, and 0.56 yuan (the impact of stock transfers has not yet been taken into account). The PE corresponding to the latest stock prices is 41.8X, 34.9X, and 33.6X, respectively. While further expanding the company's business and outlets, this acquisition will significantly increase the company's ROE level. We maintain an investment rating of “increase in holdings” in companies and recommend that investors actively lay out their positions.