Incident description The company released its 2015 annual report: operating revenue of 1,554 billion yuan, up 4.63% year on year; net profit of 284 million yuan, up 50.27% year on year. The company also released its 2016 quarterly report: operating income of 282 million yuan, an increase of 0.38% over the previous year; net profit - 14.917 million yuan. The incident review annual report was in line with expectations, and the downturn in the industry and seasonal factors led to phased losses in Q1. The richer advertising business increased the company's advertising and planning revenue by 2.18% against the market, ensuring the stability of the company's overall operation. The decline in the newspaper and printing business was partially compensated by the emerging information service business (faster dissemination). The investment income from the transfer of part of the shares on the 19th floor led to an increase in the company's net profit. The first quarter was a low season for traditional advertising, and the newspaper advertising industry declined, leading to phased losses in Q1. Endogenous management structure adjustments and epitaxial investment are being accelerated, and transformation and upgrading are worth looking forward to. 1) The company has new media genes, and the layout of new media among peers is forward-looking (represented by the 19th floor). 2) Judging from the current layout, the pace of the company's transformation has clearly accelerated. The endogenous side is expanding the integrated marketing layout for exhibitions, outdoor, subways, new media, etc. based on local resource advantages, and the epitaxial side used mergers and acquisitions, capital increases, share participation, etc. to achieve a total of 23 new subsidiaries in 2015. The company has now achieved layout in the fields of mobile video, big data, and the entire IP industry chain. Coupled with industrial funds and investment companies that are deeply involved, it is expected that extension will still be an important development direction for the company. 3) In terms of investment results, rapid communication of key projects (51% equity) saw a sharp increase in revenue in 2015. The company's joint ventures and joint ventures contributed a total investment income of 34.5 million yuan throughout the year. With further improvements in the industrial chain in the future, upstream and downstream integration and collaboration in the company's business is expected to be highlighted. The merger and acquisition of China Education in the future has been completed, and the potential for large-scale expansion brings medium- to long-term growth prospects. The company's announcement revealed that future mergers and acquisitions with China Education have been completed, and the cooperation is going smoothly. In the future, China Education is committed to jointly organizing cooperative programs such as vocational education and international education with institutions of higher learning across the country: 1) The market space is large, and the state encourages some local undergraduate colleges to shift to applied ones to enhance investment and quality in vocational education. 2) The business model is good, and it has the characteristics of being replicable and rapidly expandable. It is expected to become a vocational education group providing professional and efficient services in colleges and universities in the future. 3) The business foundation is good, the target has successful operation cases in the Beijing region, and is rich in experience. Maintain a “buy” rating. The company's 2016/2017 EPS is expected to be 0.33 yuan and 0.37 yuan, respectively, corresponding to PE 26 times and 24 times, maintaining the purchase rating. Risk warning: Traditional advertising boom is declining; investment, mergers and acquisitions and business integration fall short of expectations.