Key investment events: The company released its 2016 semi-annual report. The first half of 2016 achieved operating income of 583 million yuan, an increase of 89.32% over the previous year, and net profit attributable to shareholders of listed companies of 63.3438 million yuan, an increase of 205.5% over the previous year. The LED business solidifies the foundation, and digital marketing contributes new profit points. 1) The company's LED light source devices achieved main business revenue of 202 million yuan, an increase of 8.95% over the previous year; LED lighting achieved main revenue of 220 million yuan, an increase of 90.35% over the previous year. Nisshang Optoelectronics contributed the most to LED lighting, achieving revenue of 197 million yuan and net profit of 177.103 million yuan. 2) The Internet business has gradually become an important source of profit for the company. The company actively carried out digital marketing business and completed the acquisition of Dingsheng Yixuan and Yiwan Wireless. Since the merger on March 31, Dingsheng Yixuan achieved revenue of 65.2876 million yuan and net profit of 10.4943 million yuan; Yiwan Wireless achieved revenue of 659.274 million yuan and net profit of 15.6524 million yuan. Continue to build the layout of the entire digital marketing industry chain. Dingsheng Yixuan, which was acquired by the company, mainly provides Internet search engine advertising services for the home decoration industry; Yiwan Wireless provides one-stop mobile Internet marketing services; and the participating company Botu Advertising is a well-known Internet marketing service provider in the industry. Furthermore, the company suspended trading to acquire Beijing Vientiane Xindong Mobile Technology. The target is an enterprise that provides customized mobile marketing services, which mainly accurately advertise for customers. Customers include leaders in various industries such as Procter & Gamble, Volvo, and Erie. The company's acquisition and participation in the above four target companies aims to complete the key layout of the digital marketing ecosystem. In the future, it will gradually become a digital marketing enterprise in the entire industry chain integrating creative planning, technology platforms (DSP/DMP), data mining, wireless distribution, media resources, and customized services for advertisers. The competitiveness of mid-range and high-end LED lighting is outstanding. The subsidiary Nisshang Radio and Television enjoys a high reputation in the LED high-end professional lighting market. It is mainly engaged in R&D, production, sales and service of LED advertising lighting and LED strip lighting products, and has cooperative relationships with Agricultural Bank, China Mobile, CCTV, Hisense, Anta, and McDonald's. During the reporting period, Nisshang Optoelectronics achieved revenue of 197 million yuan, contributing 89.55% of LED lighting revenue. After the acquisition, the company and Nisshang Optoelectronics have formed good synergy and complementarity, which will greatly enhance the market share and brand influence of the company's products and increase the overall competitiveness of the LED business. Profit forecasting and investment advice. Based on various business conditions in the company's semi-annual report, we have slightly adjusted our profit forecast. We expect the company's EPS in 2016-2018 to be 0.18 yuan, 0.22 yuan, and 0.24 yuan respectively, and net profit to mother will maintain a compound growth rate of about 50% over the next three years. Maintain an “Overweight” rating. Risk warning: the risk that the performance of the M&A enterprise will be achieved or not as promised; the risk of integrating multiple businesses or falling short of expectations; the risk that the original main business or growth rate is insufficient.