I. Overview of the incident Recently, Lianjian Optoelectronics released the first quarter report of 2017 and the first employee stock ownership plan in 2017:1) Total operating revenue for the first quarter of 2017 was 704 million yuan, up 90.33% year on year, and net profit attributable to shareholders of listed companies was 73.252 million yuan, up 28.82% year on year; after deducting non-net profit of 66.1634 million yuan, up 42.33% year on year; 2) Released the first phase of the 2017 employee stock ownership plan to buy back the company's shares. The total capital limit is 45 million yuan, with no more than 50 participants ; 3) The subsidiary Liandong Culture plans to invest 25.88% of the shares in Hunan Blue Ocean Buying Enterprise Planning Co., Ltd. (hereinafter referred to as “Blue Ocean Shopping”). 2. Analysis and judgment that the 17Q1 performance was in line with market expectations. The integrated marketing service group was formed, and the integrated synergy effect was obvious 1. The main reasons for the increase in performance were: 1) Sales revenue increased sharply, and the sales ratio of the top five major customers to total sales increased further; 2) companies such as Lima Network were included in the consolidated report. 2. We believe that the company has built an integrated marketing service group with digital display equipment, brand PR services and outdoor media networks as the core. The synergy effect of integrating the three major businesses is obvious, and comprehensive marketing service capabilities have been further improved, and profitability has been further enhanced. Digital marketing customers continued to expand, and the core competitiveness of the overall solution was strengthened 1. During the reporting period, the digital marketing service sector achieved revenue of 28.0517,600 yuan, an increase of 235.71% over the previous year. The company continuously optimizes and integrates subsidiaries to provide enterprise customers with integrated advertising, brand PR, interactive event marketing and other marketing services, and has accumulated a large number of high-quality customers. Customers include famous brands such as Mengniu, China Resources Yibao, Tianhong Fund, Kunlun Mountain, TCL, Nokia, Unity, Jinli, Chanel, Youku, Jindian, etc., covering the fields of FMCG, finance, IT, communications, energy, real estate, and the Internet. During this period, the subsidiary obtained the operating agency rights of Shenma Guangdong Province and actively developed the mobile information flow advertising market. Accurate segmentation has become Tencent's core social advertising service provider, and the core competitiveness of the company's overall marketing solutions has been further enhanced. 2. We believe that the company can provide a complete set of digital marketing service solutions. As the business further expands to mobile, the company's digital marketing services will continue to grow rapidly. Digital outdoor media resources continue to be abundant, covering major cities across the country 1. During the reporting period, the digital outdoor sector achieved revenue of 197.3435 million yuan, an increase of 126.46% over the same period last year. The company has a total of about 250,000 square meters of outdoor media, covering Chengdu, Nanjing, Taiyuan, Shanghai and Xi'an; the e-TSM outdoor media resource management system is connected to 12,968 media suppliers, covering 342 cities across the country, with 55,511 advertising resources, and a total media area of 17.278,000 square meters. 2. We believe that rich digital outdoor media resources are one of the company's core competitive advantages. They will become advertising carriers for digital marketing businesses and continue to import high-quality traffic to other businesses. The digital equipment business is positioned as high-end, benefiting from the boom in the LED small-pitch industry 1. During the reporting period, the digital display equipment sector achieved revenue of 225.7875 million yuan, an increase of 13.46% over the previous year. Digital display equipment products include full-color LED displays, indoor full-color LED displays, small-pitch LED displays, etc. The company can provide unified command and dispatch system solutions in the fields of electricity, communications, transportation, public security, energy, meteorology, security, radio and television. The products have been sold to more than 100 countries and regions including the European Union, the United States, Brazil, the Middle East, and Japan. We believe that due to the reshuffle of small and medium-sized smartphone manufacturers due to price increases for various electronic components, the market share of major brand customers will continue to increase, and the metal structural parts business will continue to grow at a high rate. The waterproof materials business will be 2. We believe that due to the reshuffle of small and medium-sized smartphone manufacturers due to price increases for various electronic components, the market share of major brand customers will continue to increase, and the metal structural parts business will continue to grow at a high rate. The waterproof materials business will be 2. We believe that with the continuous integration and optimization of internal resources, digital display equipment will continue to benefit from the boom in the LED small-pitch industry. The first phase of the 2017 employee shareholding plan was released, which was used to repurchase the company's shares. The long-term unlocking showed sufficient confidence in the company's long-term development. The total capital limit of the current employee shareholding plan was 45 million yuan, and the number of participants was no more than 50. The total subscription amount for 2 executives did not exceed 10 million shares, accounting for about 22.22% of the total share of the shareholding plan; the total subscription amount for other employees did not exceed 35 million shares, accounting for 77.78% of the shareholding plan, and the period of existence was 72 months. Based on the total capital limit of 45 million yuan when the employee's shareholding plan was established, and the maximum price of the company's share repurchase price was 25 yuan/share, the number of company shares purchased and held by the employee's shareholding plan was approximately 1.8 million shares, accounting for 0.293% of the company's total share capital. 2. The unlock period is long. The lockdown period for this employee stock ownership plan is 12 months, 24 months, 36 months, 48 months, and 60 months after the transfer is completed, respectively. The underlying stock is unlocked in five installments 12 months after the transfer is completed, with a rate of 20% each time. 3. We believe that the unlocking of this employee stock ownership plan will further establish a long-term incentive mechanism, attract and retain talents, fully mobilize the enthusiasm of managers and core cadres, effectively combine the interests of shareholders, the company and individuals, and make all parties pay attention to the long-term development of the company. Blue Ocean has high quality assets and is highly complementary to the digital marketing business 1. The company plans to invest 110 million yuan to buy 25.88% of Blue Ocean's shares, of which after transferring 14.08% of Blue Ocean's shares for 42.24 million yuan, then increase Blue Ocean's capital with 67.76 million yuan to obtain 14.08% of Blue Ocean's shares. Blue Ocean Buying's main business includes real estate marketing services and acquisition of real estate sales rights. In 2016, Blue Ocean Purchase achieved revenue of 119 million yuan and net profit of 32.66 million yuan. From January to March 2017, Blue Ocean achieved revenue of 31.93 million yuan and net profit of 12.9 million yuan. 2. We believe that Blue Ocean Buying has the advantages of a strong Internet real estate trading platform, experienced management team, real estate industry resources, etc., and will be able to better explore the huge commercial real estate operation market. Investing in Blue Ocean will help the company obtain real estate big data resources and real estate developer customers, help the company develop a real estate market with huge advertising and marketing needs, and cooperation between the two sides can achieve complementary resources and synergy of advantages. 3. Profit forecast and investment recommendations Considering that the company provided equity incentives to management in 2016, the equity incentive exercise price was 24.40 yuan/share on May 17, 2016, and the current stock price is highly secure. Considering the impact of the acquisition of Artixium, it is estimated that the company's 2017-2019 exam preparation EPS will be 0.97 yuan, 1.12 yuan, and 1.26 yuan. Based on the flexibility of the company's performance growth, the company can be valued 30 to 35 times in 2017. The reasonable valuation for the next 6 months is 29.10 yuan to 33.95 yuan, maintaining a “highly recommended” rating. 4. Risk warning: 1. The acquisition company's performance falls short of expectations; 2. The business integration of subsidiaries falls short of expectations; 3. Industry competition intensifies.