With the acquisition of Internet Port and the layout of IDC, the cloud computing company's purchase of 51% of the shares in Internet Port has completed the registration of industrial and commercial changes, with a transaction amount of about 39.7.8 million yuan. According to the Internet Harbor Performance Promise, the net profit for 2016-2018 was 40.5 million yuan, 69 million yuan, and 93 million yuan, respectively. The three main lines of the Internet port lay out cloud computing: 1) Accelerate the expansion of IDC computer rooms to lay the physical foundation for the development of cloud computing. Internet Port currently operates 10,000 cabinets in Beishangguang, of which about 2,000 cabinets were built on its own in 2015, and the scale of expansion has accelerated since 2016. At the end of 2016, the number of self-built cabinets reached about 5,000, and is expected to increase to 7,000 to 10,000 cabinets by 2017; 2) The country is the first to deploy an SDN network architecture to provide technical support for future cloud computing-driven traffic explosions. As the scale of traditional IDC increases, problems such as inefficiency and waste of bandwidth resources will occur. SDN is the mainstream technology for solving such problems. The company was the first in China to implement an interconnected wide-area network that applied the SDN architecture to data centers in dozens of cities across the country. 3) Cooperate with leading companies in the industry to deploy hybrid clouds ahead of schedule. Hybrid cloud is one of the mainstream trends in future cloud computing. The company cooperated with Gao Yun, a leading private cloud service product in China, to jointly launch an industry-leading hybrid cloud system, covering functions such as hybrid cloud management, automated operation and maintenance, monitoring and alerting, self-service IT, and continuous delivery. It can support multiple centers and heterogeneous network architectures in remote locations to achieve comprehensive business control. The company acquired Internet Harbor and transformed the fields of IDC and cloud computing. The Internet port itself has technological and resource advantages in the field of cloud computing. Combined with the company's capital and technical collaboration, the integrated layout of “IDC+SDN+ cloud computing”, differentiated competition will help the company stand out in the field of cloud computing in the future. The traditional main business maintains steady development 1) The 4G network accelerates development, driving the steady development of the traditional main business. Domestic 4G construction has moved from focusing on coverage to competing for speed and service. Network quality is becoming more important, which in turn drives demand for the Internet premium market. 2) Increased market competition is expected to benefit from increased market concentration. Currently, the number of domestic third-party network optimization service providers is large, small in scale, and the degree of homogenization is serious. Basically, they are in a state of complete competition. As an industry leader, on the one hand, the company has expanded its main business to a complete industrial chain through mergers and acquisitions, and on the other hand, it has customer and resource advantages, and is expected to benefit from increased market concentration in the future. Also, if you compare several companies in the same industry in recent years, this trend does exist. 3) Actively explore overseas markets. The company began planning overseas market business in early 2015, and relied on cooperation with equipment vendors such as Huawei and ZTE to provide technical services overseas. By the end of 2015, the company's business covered 8 countries and achieved business revenue of 8.74 million yuan. In 2016, the company further stepped up efforts to expand overseas projects. In the first half of the year, a Hong Kong company was set up specifically to connect with overseas network optimization and maintenance projects. Investment suggestions and ratings benefit from the rapid expansion of the 4G market and drive demand for network optimization. The traditional main business is expected to remain stable. Acquire Internet Harbor, officially enter the fields of IDC and cloud computing, and lay out the “cloud+management” integrated business. At the same time, the company's M&A funds will continue to invest and acquire in fields such as IDC, SDN networks, cloud computing and big data, and collaborate on business and capital with listed companies. Considering the contribution of 51% of Internet Harbor's shares to the company's profits, we forecast the company's net profit for 16-18 to be 90 million, 125 million, and 137 million yuan. The company's market capitalization is 4,542 billion yuan, and the corresponding PE for 2016-2018 is 50X, 36X, and 33X. We are optimistic about the development trend of the cloud computing industry, acknowledge the company's layout, and judge that the business and capital collaboration between the company and the Internet port will continue to deepen. Take into account the company's market value and valuation level, give a buying rating, and continue to focus on recommendations! Risk warning: 1. Competition in the network optimization business has further intensified; 2. The development of new business falls short of expectations; 3. The progress of company integration is slower than expected.