Key Investment Results for the first three quarters were impressive, with net profit rising by more than 277%. Dilong Culture achieved revenue of 1,138 billion yuan (up 73.3% year on year)/net profit of 258 million yuan (up 227.3% year on year) in the first three quarters of 2016. The sharp increase in the company's profit was due to the merger of Meishengyuan in May of this year. The three-quarter report predicts that net profit due to mother for the full year of 2016 will reach 3.69 to 412 million, with a year-on-year growth range of 330% to 380%. Meishengyuan is in the first tier of domestic stand-alone mobile game distribution, and the reshuffle of the industry is accelerating. Meishengyuan's revenue and net profit have grown rapidly in recent years. After opening up the market through large-scale investment in the early stages of the business, Meishengyuan's profit scale/growth rate has grown rapidly since 2015, and gross margin/net margin increased rapidly. In 2015, the three major operators accelerated the rectification of the stand-alone game industry, improving the user experience by setting a series of payment standards, removing products with a high number of complaints, and focusing on stand-alone games with high DAU and high-quality games with few complaints. We believe that operators' measures to strengthen controls will accelerate the reshuffle process in the stand-alone mobile game market, and Meishengyuan's market share is expected to increase in the future. Meishengyuan is transitioning to online mobile games, and the performance is expected to exceed expectations. Meishengyuan promised net profit of $180/3.20/468 million by 2017. In May-September 2016, Meishengyuan's consolidated net profit reached 62.18 million yuan, and in May-September, Meishengyuan contributed 100 million yuan in revenue. Currently, Meishengyuan is adding an online game business based on the steady growth of mobile stand-alone games and advertising promotion business. The business prospects are bright, and profits are expected to exceed expectations. Set up an equity investment fund to focus on the culture and entertainment industry. In September 2016, Dilong Culture plans to establish a subsidiary Zhejiang Dilong Equity Investment Fund Management Co., Ltd. with 100 million yuan of its own capital to promote the company's transformation into the culture and entertainment industry. Through the Cultural Industry Investment Fund, the company will strengthen the cultivation of cultural industry projects, enrich project sources, and further improve the layout of the pan-entertainment sector. Maintaining a “buy” rating: Considering Meishengyuan's performance promises, we expect the company's annual net profit to be 405/617/707 million, respectively, with a corresponding dilution of 0.53/0.72/0.83 yuan. The current price corresponds to 30/22/19 times that of 2016-2018. Referring to the game industry's average PE of 47 times, we gave Dilong Culture a 40x valuation, with a target price of 20 yuan. Maintain a “buy” rating! Risk warning: industry competition intensifies; target promises fall short of expectations