Events. The company announced on September 23 that the State Forestry Administration and the people's Government of Jilin Province jointly signed a "Strategic Cooperation Agreement" on the "demonstration Project jointly built by the Provincial Bureau of the Modernization of State-owned Forestry Management in Jilin Province". The agreement determines that Jishi Media is responsible for the project construction and follow-up operation services for the general contractor of the demonstration project. The construction period of this joint construction project is three years, and the total investment is expected to be 864 million yuan. The construction will be carried out with "two networks and two centers" as the core. The specific construction objectives are: 1) to build "forestry space Internet" and "forestry Internet of things". Realize the multi-dimensional perception of the basic data and dynamic change data of state-owned forestry resources. 2) establish "Northeast Forestry big data Cloud Center" and "Provincial Forestry Comprehensive Management and dispatching Command Center" to realize comprehensive information-based centralized management and operation of full business; 3) build a monitoring, evaluation and early warning platform for forestry resources, achieve comprehensive perception of forestry ecology, controllable risk early warning, dynamic supervision of forest land, real-time protection of species, and create forestry ecological resources management new business type.

To build the "Internet +" forestry system in Jilin Province, the profit model is mainly for the construction and operation of enterprises and the government to buy services.

As the general contractor of the project, the company will use modern information technologies such as cloud computing, big data, wired and wireless fusion, as well as space satellites, drones, intelligent sensors and other applications of the Internet of things, together with the State Forestry Administration, Jilin Provincial people's Government and relevant subjects, to build Jilin Province intelligent forestry information ecosystem based on "two networks, two centers" as the core. At the same time, relying on the national industrial policy and related capital construction financial support, through "enterprise construction and operation, government purchase services" and other ways, will open up a new profit growth point for the company's social information services. The operation period of the project is planned to be 15 years, during which the company is allowed to obtain income by providing project operation services and the operation of non-secret data assets, and special project companies are allowed to participate in industrial projects such as reserve forest, forest tourism, ecological culture, and deep processing of forest products.

Our point of view. As the development of the main cable TV business has reached saturation, there may even be a slight decline in the future, and transformation has become an inevitable trend. The company's state-owned enterprise identity has natural advantages in obtaining education, data and other resources in the province. prior to the successful research and development of 10 Gigabit chips and the basic completion of wired and wireless information transmission channels, the company's social information service will bring substantial revenue growth for the company, and we expect that the education business, which has been basically completed in the previous social information service layout, will achieve a net profit of about 100 million in 16 years. With the official landing of this information-based intelligent forestry project, with reference to the company's educational business with similar profit model and the scale of government investment of 864 million yuan, we judge that the company's intelligent forestry business will begin to make a profit within 1-2 years, and the profit scale is expected to reach the level of 100 million yuan. In addition, we believe that the company's achievements in social information services and good cooperative relations with the government will help the company to obtain cooperation opportunities with the government in other fields, and continue to expand the company's social information service capacity and scale in the province.

Risk hint. The development of the new business fell short of expectations.