Key investment points The company's performance increased markedly in the first three quarters, and Meishengyuan also contributed profits. The company achieved operating income of 1,138 million yuan in the first three quarters of 2016, an increase of 73.3% over the same period last year, and net profit of 258 million yuan, an increase of 277.3% over the same period last year. The reason for the sharp increase in performance is that the company completed a major asset restructuring in this period and consolidated Meishengyuan's operating income for May-September. In the first three quarters, Meishengyuan's business revenue added to the online game business on the basis of steady growth in mobile stand-alone games and advertising promotion business. Net profit of 149 million yuan was achieved in the third quarter alone (+459.6). It is estimated that the company's net profit range for the whole year will be between 369 and 412 million, an increase of 330% to 380% over the previous year. After the merger of Meishengyuan, the company has completely transformed the culture and entertainment industry, and its performance has continued to improve. The company acquired 100% of Meishengyuan's shares at a total price of 3.4 billion yuan and was announced in May of this year, completely transforming the mobile game sector. Meishengyuan is a mobile game developer and publisher with impressive performance. The company is a leading company in the domestic stand-alone mobile game industry, and also has strong game distribution capabilities. Currently, the company has established business cooperation with 175 channel vendors, and has collaborated to distribute more than 80 stand-alone mobile games. In the future, the company will continue to expand its presence in online game development and distribution, and its performance is expected to continue to be unleashed. From 2015 to 2017, Meishengyuan promised net profit of not less than 180 million yuan (actual completion of 184 million yuan), 320 million yuan, and 468 million yuan. Set up an equity investment fund to deepen the company's layout in the culture and entertainment industry. The company plans to invest 100 million yuan of its own capital to establish Zhejiang Dilong Equity Investment Fund Management Co., Ltd., a wholly-owned subsidiary, as a management platform for the company's investment in the cultural and entertainment industry, promote the company's cultivation of cultural industry projects through investment in cultural industry funds, and integrate related industries in line with the company's strategic development through equity investment, mergers and acquisitions, etc., focusing on pan-entertainment fields such as games, film and television, and IP. With the collaboration of the two main industries, mobile games have become the company's new performance engine, and profit levels have improved dramatically. In 2015, China's game market reached 140.7 billion, of which the mobile game market was 51.5 billion. We expect mobile games to maintain a growth rate of more than 30% in the next few years, and their share in the game industry will continue to rise. The mobile game R&D and distribution business that Meishengyuan focuses on will fully benefit from the prosperity of the industry, and the company's entry from mobile stand-alone games to the online game market with more market space is expected to continue to be released. Combined with the company's leading position in the traditional main business of decorative materials, with the advantages it already has in terms of production technology, production scale, customer resources and brands, it is expected that profits will continue to grow steadily in the future, and collaboration between the two major industries can greatly increase the company's profit level. Profit forecast: We expect the company's 2016-2018 EPS to be 0.47 yuan, 0.71 yuan, and 0.86 yuan respectively. Also, in the same industry, Kunlun World Wide, Tenjin Entertainment, etc. unanimously expected 25-54 times that of PE in 2016. Considering the company's original building materials business, we gave the company a valuation of 31 times that of 2017, corresponding to the target price of 22.01 yuan. Give a buy rating. Risk warning: The performance of mobile game products fell short of expectations, and profit promises fell short of standards.