Company News As of December 11, CICC held a total of about 65 million shares, accounting for 22.68%, surpassing Jiaotong University Industrial Group and its co-actors to become the company's largest shareholder. Incident review: CICC continued to increase its holdings to become the largest shareholder. The controlling shareholder has not yet changed. From September 1 to December 11, 2017, CICC purchased a total of 14.327,500 shares through collective bidding, accounting for 5%. From December 12, 2017 to February 6, 2018, the China Financial Department once again increased its holdings by 14.3275 million shares, accounting for 5%, and a cumulative holding of 28.655 million shares, accounting for 10%. As of May 17, 2018, the cumulative shareholding of CICC increased to 42.8824 million shares, accounting for 15%. As of September 13, 2018, the cumulative shareholding of CICC increased to 57.3098 million shares, accounting for 20%. As of December 11, 2018, the cumulative shareholding of CICC reached 65.01 million shares, accounting for 22.68%, surpassing the shareholding ratio of Jiaotong University Industrial Group and its co-actors (22.65%), making it the company's largest shareholder. According to the November 15 announcement, the China Financial Department plans to increase its holdings by 0.5%-5% within the next 6 months. As of December 11, it has already increased its holdings by 1.5%, and there is still room for a maximum increase of 3.5%. With the China Finance Department becoming the largest shareholder, the company's equity structure has been clearly optimized, and management efficiency is expected to improve in the future. This change in equity did not affect the tender acquisition. The controlling shareholders and actual controllers of the company have not yet changed; it is still the Jiaotong University Industrial Group. Onli Education K12 is actively expanding markets outside of Shanghai and promoting quality education. As a well-known K12 subject guidance brand in Shanghai, Onli Education has various sub-brands such as Onli Intelligence Cube, Onli Middle School Students, Onli Children, and Onli Foreign Language. It has opened more than 200 campuses in Shanghai and has more than 1,000 partner schools nationwide. In 2018, the company actively expanded markets outside Shanghai, and established regional branches in 10 cities in 8 provinces of Gansu, Hunan, Jiangsu, Hebei, Liaoning, Shandong, Shaanxi and Henan, and carried out a nationwide layout. At the same time, the company continues to invest in the quality education sector. Onli STEM, Dongshubang, Huidong Sports, Xia Jia, Zhi Pei Xing, Xiaofa Lion, Big Dou, Onli Study Tour, and Neighborhood Studies have successively created and emerged. The business covers the fields of piano, chess, calligraphy, painting & Chinese studies, technology, sports, creative arts, personalized small class American language teaching, mathematical thinking & logic, native Chinese language education, international study tours, community parent-child education, etc. According to the official website, Onli STEM is currently located in Shanghai, Zhejiang, Jiangsu, Shandong, Jiangxi, Anhui, Shaanxi, Hunan, and Guangdong, with a total of 34 campuses, of which 13 are in Shanghai. In addition, Onli Education has led the K12 online one-on-one brand Hi Classroom. Hi Classroom's special feature is to create a full-time teacher model, which is clearly superior to the part-time teacher model in terms of customer satisfaction, renewal rate, and referral rate. The investment proposal maintains the profit forecast. The net profit attributable to the company in 2018-2020 is estimated to be 1.17/1.69/235 million yuan, corresponding to EPS of 0.41/0.59/0.82 yuan/share, respectively, and 53/37/26 times the corresponding PE (based on 2018/12/11 closing price). Currently, the education and training industry is in the national rectification stage, which affects the speed of building new campuses in the short term, but after the long-term reshuffle of the industry and raising the threshold, it is conducive to concentrating market share on leading enterprises. As a leading education and training brand in Shanghai, Onli enjoys a certain advantage. Maintain a “prudent increase in holdings” rating. Risks indicate the risk of uncertainty brought about by stricter policy supervision, the risk that business development falls short of expectations, the risk of increased market competition, and the risk of brain drain.