The main points of the report describe the incident. The company received the “Approval on Approving Zhongnanhong Culture Group Co., Ltd. to issue shares from Zhili and others to purchase assets and raise supporting capital” from the China Securities Regulatory Commission on February 20, 2017 (the date of issue is February 16, 2016). A private launch conference for event reviews will accelerate the layout of the game field. The company's non-public offering was conditionally approved by the Securities Regulatory Commission's M&A and Reorganization Committee on December 22, 2016. After receiving approval from the Securities Regulatory Commission on February 20, 2017, subsequent issuance is expected to be completed soon. The company plans to purchase 90% of Aurora Network's shares through a combination of issuing shares and paying cash (cash payment of 267.3 million yuan, issuance of shares of 40.95 million yuan), while issuing shares to raise supporting capital to pay for cash consideration, related fees and taxes, and construction of the Aurora Network R&D center project. Shanghai Aurora Network has outstanding R&D capabilities, making up for the shortcomings in the company's game business. The company previously used an acquisition value of 870 million yuan to interact with 100% equity in the game distribution process. The current acquisition of Aurora Network has greatly enhanced the company's game development capabilities. Aurora Network adheres to the quality game line. The core team has been deeply involved in game development for more than ten years, and the quality of games has formed a good reputation in the industry. Both game products “Chaos Warzone” and “Valkyrie Zhao Zilong” have broken into the top five online game launch lists, and as of June this year, the cumulative number of users reached 40 million and 24 million respectively; as of October 2016, the total turnover of these two games was over 400 million yuan. At the same time, Aurora Network promised to achieve net profit of no less than 55 million yuan, 68.75 million yuan, and 85.9375 million yuan respectively in 2016-2018, which will significantly increase the company's performance. IP is the core to build a large cultural industry chain and give full play to the synergistic effects of various businesses. Through the acquisition of Aurora Network, Zhongnan Culture can not only achieve the further development of Zhongnan Culture's business in the game sector, but also use Aurora Network's successful experience in the field of IP development to fully leverage various business sectors to unleash strong synergies and consolidate the IP-centered Internet culture industry operation model of listed companies. Profit forecast: The company's 2016-2018 EPS is expected to be 0.33 yuan, 0.66 yuan, and 0.88 yuan, and the corresponding PE is 47 times, 24 times, and 18 times, respectively, giving it a “buy” rating. Risk tips: 1. The risk of mergers and acquisitions falling short of expectations; 2. The risk of policy regulation.