1. Event Overview Recently, Lianjian Optoelectronics released its 2016 annual performance report: it achieved total operating income of 2,798 billion yuan, an increase of 83.75% over the previous year, and net profit attributable to shareholders of listed companies of 401 million yuan, an increase of 79.11% over the previous year. The corresponding EPS was 0.69 yuan, an increase of 53.10% over the previous year. 1. 2. Analysis and judgment The performance in 2016 increased dramatically. The three major business segments integrated online and offline, and the marketing scale increased significantly. Q4 of '16 achieved revenue of 925 million yuan, an increase of 112.96% over the previous year, an increase of 5.48% over the previous year, and net profit of 142 million yuan, an increase of 124.99% over the previous year and 23.16% over the previous year. The increase in the company's performance mainly benefited from the increase in revenue from the three major businesses, the merger of companies such as Limar Network, and the increase in profitability. During the reporting period, the company completed acquisitions of companies such as Lima Network. We believe that the company can provide customers with comprehensive marketing solutions covering brand PR, interactive activities, Internet advertising, outdoor advertising, and smart display devices. With the improvement of marketing capabilities, the scale effect and synergy of the main business are further enhanced, and the scale of sales will continue to grow. Outreach acquisitions strengthen precision digital marketing, and big data enhances the company's marketing competitiveness. The company invests in Shuxiong Network to enter the field of big data in offline business scenarios; acquires Precise Quanzong and Shenzhen Lima to enhance online advertising and marketing business; and acquires Litang Marketing, combined with the previous acquisition of Youtuo PR, to collaborate to expand the company's PR and marketing service industry customers. We believe that by combining big data mining and analysis tools, accurate portrayal of user portraits and behavioral tags, and digital outdoor resource layout, the company will provide customers with accurate data operation and scenario marketing data services, and its competitiveness will increase significantly. Digital outdoor expands territory, integrates resources across the country, and enhances profitability. The company has successively acquired Huahan Culture to cover outdoor advertising in key business districts in Taiyuan; acquired Ocean Media to achieve advertising coverage in cars, roofs, buses, buses, elevators, etc.; acquired Xi'an Luyi to achieve outdoor and LED large-screen advertising coverage in key business districts in Xi'an; acquired Shanghai Chengguang to achieve advertising coverage in key business districts in Shanghai; and acquired Tibet Poshi to cover advertisements in key business districts in Chengdu. We believe that the expansion of the digital outdoor footprint will achieve the strategic goal of the company becoming a “digital communication group”. Combining users' big data analysis and digital marketing capabilities, the company will make full use of outdoor media resources to improve customer satisfaction while enhancing the level of monetization of media resources. Digital equipment is expanding overseas, and the acquisition of Artixium targets top cultural and sports activities in Europe and the US. During the reporting period, the company invested 60% of Artixium's shares, greatly expanded the company's international layout, and entered the field of culture and sports. The small-pitch LED screens provided by the company also successfully entered the Rio Olympics, Shenzhen Metro, and G20 Alibaba exhibition halls. We believe that the company's LED display technology is industry-leading. With the launch of precision digital marketing and the expansion of outdoor advertising channels, the company's performance will continue to grow rapidly. 2. 3. Profit forecasts and investment recommendations take into account the company's equity incentives for management in 2016. The equity incentive exercise price on May 17, 2016 was 24.40 yuan/share. The current stock price is highly secure. Considering the impact of the acquisition of Artixium, it is estimated that the company's 2016-2018 EPS preparation will be 0.69 yuan, 0.96 yuan, and 1.11 yuan. It will give a “highly recommended” rating, which can be given a valuation of 30-35 times that of 2017, and a reasonable valuation of 28.8 yuan to 33.6 yuan for the next 6 months. 4. Risk warning: 1. The performance of the acquired company fell short of expectations; 2. The business integration of subsidiaries fell short of expectations; 3. Competition in the industry intensified.