Matters: The company issued a plan for profit distribution and capital transfer from the Provident Fund. It plans to distribute a cash dividend of RMB 1.1 (tax included) to all shareholders for every 10 shares based on the total share capital of the company on the share registration date when implementing the distribution plan in the future, and at the same time transfer 12 shares to all shareholders for every 10 shares using the capital reserve fund to all shareholders. Our comments on this are as follows. Comment: Performance has been reversed, profit distribution has boosted confidence, and the majority shareholders have no plans to reduce their holdings. Net profit attributable to shareholders of listed companies in 2016 is expected to vary between 72 million yuan and 80 million yuan, turning a loss over the previous year into a profit, and the business transformation is beginning to bear fruit. The company introduced a profit distribution plan to share the transformation results with investors, and at the same time help improve liquidity and serve the company's future strategic planning. The chairman, shareholders and executives holding 5% or more of the shares have no plans to reduce their holdings. The chairman took the initiative to increase the company's shares by 5,600,000 shares in September 2016, at an average cost of about 19 yuan, demonstrating confidence in the company's future development. Implement an equity incentive plan and bind the core team. The incentives cover the company's core management, business, and technical backbone for a total of 72 people. The unlocking conditions are that the net profit from 2016 to 2018 is not less than 7200/9360/12,168 million yuan, respectively, and the corresponding compound annual growth rate is not less than 30%, which will further strengthen the impetus for business development. The game agent model is progressing steadily, and it is expected that more than 10 models will be introduced. The company adheres to the casual game model of acting for well-known foreign manufacturers, and the quality of games is guaranteed, adding to the company's localized distribution and operation capabilities. The company has successfully introduced various products such as King, Rovio, EA, etc., and is expected to continue to break through in the number and timeliness of introduction in 2017, and is expected to exceed 10 products across the board. With full traffic operation, communication and information services are expected to grow at an accelerated pace. The company's Wi-Fi resale time has exceeded 10 million hours, accounting for the largest share of third parties. 3G/4G traffic management has a high starting point, and the layout has a first-mover advantage, focusing on expanding Internet channels and customers in the financial industry. It is expected that traffic operations will continue to bring incremental revenue contributions. The company is already involved in corporate SMS business, forming a synergistic effect with WiFi and traffic, which is expected to become a new performance growth point. Set up a mobile Internet industry fund to expand and expand the layout. The company signed an agreement with Ping An Finance, Wonderful World, and Ping An Wisdom to jointly establish a mobile Internet industry investment merger and acquisition fund. The estimated total fund size is RMB 500 million, of which the company has pledged 150 million yuan. Companies participate in the establishment of industrial funds, and the transformation of mobile Internet is expected to accelerate. The investment direction of the fund covers communication solutions, intelligent hardware, mobile Internet services, such as video lottery cloud platforms, mobile games, etc. As the extension layout progresses in an orderly manner, the company's new strategic direction is expected to gradually take shape. Risk factors: New business growth falls short of expectations, industrial fund investment risk. Maintaining the “buy” rating: The inflection point of the company's business development has been verified, profit distribution shares the results of transformation, the transfer of equity capital to enhance liquidity, and equity incentives and the increase in shareholders' holdings strengthen the driving force for development. Maintain the company's 2016-2018 EPS forecast at 0.29/0.41/0.52 yuan. Considering the company's business reversal and extension expectations, maintain the target price of 26 yuan and the “buy” rating.