Investment points 3Q11 profit increased 27.40% year on year, in line with market and our expectations 1-3Q11. Publishing media revenue and net profit increased 8.0% year on year and fell 9.8% year on year to 1,145 million yuan, 63 million yuan, and EPS of 0.10 yuan, respectively, in line with market expectations. In 3Q11, the revenue and net profit of publishing media increased by 18.2% and 27.4% respectively to 490 million yuan, 17 million yuan, and EPS 0.03 yuan. Revenue grew steadily, and the profit for the first three quarters fell 1-3Q11 year on year due to the reduction in government subsidies. The company's business developed steadily. Among them, the book publishing business was affected by the development of new media, and the growth rate declined and remained at around 10%, while gross margin fell 1.2 percentage points to 22.5%. In the first three quarters, government subsidies were reduced, leading to a decrease in non-operating income of 5.6 million yuan to 19.5 million yuan, resulting in a 9.8% year-on-year decline in the company's profit in the first three quarters. Cultural revitalization policies promote regional integration, and asset injection is expected to bring investment opportunities. The recent session of the Sixth Central Committee of the 17th Central Committee of the Communist Party of China deliberated and passed the “Decision of the CPC Central Committee on Certain Major Issues Concerning Deepening the Reform of the Cultural System and Promoting the Great Development and Prosperity of Socialist Culture”, which proposed that China would cultivate and build a number of powerful and competitive large-scale cultural enterprises. Among them, the idea of publishing companies integrating across regions and building a publishing and media group is highly feasible. As the only listed publishing company in Liaoning Province, the company is most likely to become an integrated platform for publishing companies in Liaoning Province and even the three northeast provinces. Asset injection is expected to help improve the company's overall valuation level, and there are long-term investment opportunities in the next few years. Focus on regional integration and give a “recommended” rating. Due to unequal revenue and cost confirmation, the fourth quarter is generally the peak profit release period for publishing companies. Since there were few government subsidies in the first three quarters, recovery is expected in the fourth quarter. It is expected that 4Q11 profit will account for about 60% of the annual profit. We forecast the company's earnings per share for 2011\ 2012\ 2013 to be 0.26 yuan, 0.29 yuan, and 0.32 yuan, and the current price-earnings ratio corresponding to 2011\ 2012\ 2013 is 34.7 times, 31.6 times, and 28.0 times, respectively. Considering that the company benefits from cultural revitalization policies, there are strong asset injection expectations. After regional integration, the integrated platform will bring about a leap in the company's competitiveness, have good development prospects, and be given a “recommended” rating.