Incident: The company issued a fixed increase plan. It plans to issue no more than 69.307 million shares on a non-public basis and raise no more than 910 million yuan. The sales period is limited to 6 months. Fund-raising projects include new brand retail construction (total investment of 436 million yuan, fundraising amount of 356 million yuan), smart marketing cloud construction (total investment of 222 million yuan, fundraising amount of 186 million yuan), and innovative technology research (total investment of 108 million yuan, fundraising amount of 97.6 million yuan). Optimize business models and focus on promoting high ROE business scenarios such as brand agency operations. This time, the company plans to raise additional capital to focus on expanding brand agency operations, and invest in new brand retail ($356 million) and smart marketing cloud construction ($186 million). The company's current fund-raising is mainly used to upgrade the business model, which is expected to greatly increase the ROE level (traditional marketing business ROE is only 10%). Brand new retail projects: The company has accumulated rich experience in e-commerce business, and has successively incubated successful cases such as Philips (2015), Korea's OOZOO Mask (2019), and Japan's Recolte Small Home Appliance (2019). In March 2020, the company successfully launched the joint venture snack food brand Quka (omni-channel operation), and in April, it is expected to launch 1-3 new brand agency operation projects (new channels, JD channels). The project company will focus on customer development, warehousing and logistics construction on behalf of the brand. Smart marketing cloud project: The company has successively developed accurate advertising system “Magic Map” series products, SEM optimization systems, automated trading systems, privatized program purchasing systems, data management platforms, and automatic monitoring systems. The project company will focus on building technology products for brand agency operations, integrate and iterate existing brand marketing technology products, and form an integrated integrated intelligent marketing cloud platform, while also meeting the marketing needs, data requirements, and analysis needs of the two major business systems of brand marketing and agency operation. We believe that marketing companies have the advantages and innate conditions of in-depth layout of traditional business and brand agency operations: brand owners are rich in resources, and brands operate natural customer pools on behalf of brands. The increase in performance at the beginning of the layout mainly came from the rapid increase in the number of connected brands (volume increase), and only then did the increase in performance shift to refined operating capacity (increase in “ARPU” value). The marketing company's upstream brand owners are rich in resources, and there is plenty of room for careful selection in the early stages of transformation, so priority can be given to developing suitable brands and suitable business models. There is a high degree of overlap between business functions and e-commerce agency operations. There are five major functions of e-commerce agency operations: including IT/data analysis, e-commerce operations, customer service, warehousing logistics, and marketing. Among them, the two major functions of data analysis (user tag system, effect monitoring system, DMP) and marketing are the core functions of marketing companies. Customer service and warehousing logistics can be outsourced, and e-commerce operation capabilities are the key to the real transformation and success of marketing companies. In terms of data analysis, the core competency of marketing companies is off-site traffic data, and the core competency of TP companies is in-site traffic data. Focus on the future and seize new 5G traffic. The company's core idea is to provide a full range of services around the growing needs of brand customers, focusing on new 5G traffic to seize emerging entry resources. The new company plans to focus on developing three R&D directions, including the Magellan platform (brand private traffic access and credit exchange), Huayang Vision IoT system, and RCS terminal application development. The new traffic portal will promote effective monetization of brand marketing and agency operations, helping to exert synergies. Investment suggestions: The company deepens the layout of brand agency operations based on its existing experience in e-commerce operations. In the future, the company will focus on exploring new operating models with large-scale replication capabilities, including new channel agency operation models, joint venture agency operation models, etc. The company's high performance flexibility is expected to be mainly due to brand agency operations and is expected to be fully released in Q2 2020. Given the inflection point in the industry, the company has active transformation demands, and is expected to gain both the company's alpha and industry beta under the changing 5G traffic situation. We expect the company's net profit in 2019-2021 to be 200 million yuan, 350 million yuan, and 500 million yuan, corresponding to EPS of 0.87 yuan, 1.51 yuan, and 2.16 yuan, giving it 25 times PE in 2020. The target price is 37.75 yuan, giving it a “buy-A” rating. Risk warning: Risks such as downstream competition intensity falling short of expectations, new customer development progress falling short of expectations, brand agency business not progressing as expected, and sales budget expansion falling short of expectations.