Investment points The main television business strategy is clear, and the data business brings profit inflection points: the company is the only cable television network operator within the administrative area of Shaanxi Province, and the enterprise supporting the construction of e-government transmission networks in Shaanxi Province. The province's wired+wireless network covers more than 10 million users, and the two-way network covers 6.17 million users. In terms of television business, judging from the national development trend, the proportion of users penetrating two-way networks is gradually increasing. It can be seen that high-quality digital television is a clear trend. Two-way interactive high-definition television is a clear trend. By speeding up digital transformation, promoting the transformation of two-way networks, developing high-definition interactive services, and enriching program content and value-added applications, the company continues to expand the number of users, and is at the forefront of the television business in the country. In May of this year, China Radio and Television obtained the “Basic Telecommunication Business Operation License” from the Ministry of Industry and Information Technology, and the integration of the three networks is ready for everything. The company's broadband access business has developed rapidly in the past two years. The number of users has exceeded 750,000, and the revenue growth rate is obvious. It has become the main source of growth in the company's performance, and the 300 million yuan loan applied for by the company from Guokai Development Fund Co., Ltd. for a special construction fund for basic network and data broadband construction has been approved, so it is expected that profit and profit will be further expanded this year. Wireless was approved, and the “smart city” path became clear: the company signed a “smart city” business strategic cooperation agreement with Tongfang Co., Ltd. in March to promote smart city-related business in Shaanxi Province. The company recently issued an announcement stating that the State Administration of Radio, Film and Television has agreed to include the company as a pilot unit for the radio, television, cable and wireless integrated network test project of the General Administration. The company's overall strategy is to build “two networks and four platforms”. “Two networks” refers to building an integrated network combining “cable television network+mobile wireless network”. As a strategic information infrastructure, wired and wireless integrated networks are the foundation for the wireless television and the digitization and intelligence of information applications. Through the construction of wired and wireless integrated networks, full coverage of cable and wireless television and data networks can be achieved, and can provide a foundation for industries such as mobile Internet and wireless Internet of Things. Coupled with the 700MHz frequency resources owned by radio and television, the company is expected to further enhance synergy, greatly expand business revenue such as wireless broadband, etc., while making good arrangements for “smart city” communication requirements. IDC's business is progressing steadily, nurturing new profit points: The company announced in March that it will invest 51 million yuan in the form of money+land to jointly invest 51 million yuan with Beijing Guanghuan New Network to establish a cloud service company to operate the Internet data center business and various value-added businesses, accounting for 51% of the company. The IDC cloud computer room has ushered in a period of growth with its cost advantages and security compared to traditional servers. In addition, the company's e-government and Internet TV services themselves are in high demand, and the cloud business is expected to become a new source of profit for the company in the near future. Profit forecast and investment advice: We are optimistic about the company's wired and wireless integration on the endogenous promotion of the data business and the development prospects of the cloud computing business. The company's 2016-2018 EPS is expected to be 0.24 yuan, 0.27 yuan, and 0.29 yuan, corresponding to PE 66/60/55X. We give an “Overweight” rating. Risk warning: Broadband business competition heightens risks, and new expansion business development falls short of anticipated risks.