Key investment events: The company released its 2016 three-quarter report. Comment: 16Q3 performance maintained steady growth. 1) In the 2016 Q3, the company achieved operating income of 222 million yuan, an increase of 189% over the previous year; net profit of 6.25 million yuan, an increase of 1055%; net profit of 629 million yuan from January to September 2016, an increase of 190% over the previous year, and net profit of 42.16 million yuan, an increase of 27.79% over the previous year, in line with market expectations (the company expects net profit of 3629-42.89 million yuan from January to September). 2) In the first three quarters of 2016, due to a sharp increase in cloud costs, personnel costs, and marketing activity fees for all courses, costs and expenses increased dramatically; since the company's core business is still in the promotion period, cost increases are inevitable. The EDSaaS business and home-school interaction upgrade business development results are remarkable. 1) The company's EDSaaS business moved from a strategic layout into a large-scale promotion period, and the coverage area and user base were further expanded. As a result, the EDSaaS business revenue increased sharply in the first three quarters of 2016 to 234 million yuan, an increase of 231% over the previous year, accounting for 37% of revenue, an increase of about 1 percentage point over the previous year, and the advantages of both content and entry points continued to be consolidated. 2) The home-school interactive upgrade business achieved revenue of 196 million yuan in the first three quarters of 2016, an increase of about 43% over the previous year due to product superposition and collaboration between self-operated and post-investment channels. Earnings forecasts and ratings. The company's net profit for 2016/17/18 is estimated to be 1.20/1.51/192 million yuan, EPS is 0.19/0.24/0.30 yuan, respectively, and the current stock price corresponding to PE for the same period is 140/111/87 times. The company has formed a full business operation system with EDSaaS business as the core, home-school interactive upgrade business, subject further education business, and continuing education business. In the future, it is expected that it will continue to create a first-class online education platform in China through product optimization, upgrades, and maintenance of traffic entrances. Maintain the “Overweight” rating. Risk warning: Accounts receivable have increased further; competition in the industry has further intensified.