The overall plan for a new round of state-owned enterprise reform in Shanghai is about to come out. We expect that after its establishment, Shanghai newspaper Group will become the leading representative of the integration of cultural and state-owned assets in Shanghai in 2014. The group's reorganization and optimization of newspaper assets and a breakthrough in new media provide a lot of possible space for the restructuring, asset injection and new business development of Xinhua Media, its only capital platform. The company has achieved initial success in new business development in areas such as e-commerce. We judge that after the reorganization of major shareholders, the company will reassemble and prepare for departure. As the leading group of regional monopoly, it will achieve a new breakthrough due to the intensification of resources and the benchmarking of development. It will cover and give an increase rating for the first time. It is predicted that the EPS in 2013-15 will be 0.10,0.14,0.17 yuan respectively. In view of the company's special industry status and the promotion of reform on the company's performance in 2014, it is proposed to be valued according to the 2014 performance, with a target price of 14.00 yuan according to the PE100x valuation.

Key hypothesis: as the only listing platform after the establishment of Shanghai newspaper Group, the company fully participates in the group's breakthrough and innovation.

The company is undergoing different changes: 1) the controlling shareholder is reorganized to form the Shanghai newspaper Group, which undertakes the important task of making a breakthrough in both the influence and economic benefits of the newspaper industry in Shanghai under the goal of the new round of state-owned enterprise reform in the city. as its only capital platform, the main business may be adjusted due to the reorganization and optimization of the group's newspaper assets. 2) the company's new media business, such as e-commerce, has become the most important aspect of driving performance, and continues to develop. As Shanghai is the only capital platform for the reform of the newspaper system, we are optimistic about the possibility of future restructuring, asset injection and new business development of the company.

Catalyst: the reorganization and optimization of the group's newspaper assets, the breakthrough to new media and the promotion of traditional media.

Core risk: the process of restructuring and reform may not achieve the desired results.