The Internet TV industry is about to explode in 2017. According to data from Aowei Cloud Network, the number of Internet TV terminals (including smart TVs and boxes) reached 165 million in 2015, and the Internet TV penetration rate is 28%. It is estimated that in 2016, the number of Internet TV terminals will reach 213 million, and the Internet TV penetration rate is 36%. It is expected that by 2020, the number of Internet TV terminals will exceed 400 million, and over 70% of Chinese households use Internet TV terminals to watch programs. It is estimated that the Internet TV market size (excluding hardware) will reach 630 billion yuan by 2020. According to data from Aowei Cloud Network, the Internet TV penetration rate in China is expected to be close to 45% in 2017, which has reached the critical point where the industry explodes. Along with the rapid growth in sales volume and sales penetration rate over the years, the smart TV inventory penetration rate continues to increase. Compared with the Chinese PC Internet, mobile Internet, and the US PC Internet, we can assume that the Internet TV industry will enter the rapid growth channel of the industry in 2017. China Digital Media: An aggressive state-owned enterprise - excellent management, solid basic business, closely following the Internet trend 1. Continuing to maintain the company's leading edge 2. The majority shareholder Huashu Group will integrate the completed integration of the radio and television assets “Zhejiang Network” and place the assets and business holdings in the listed company in an appropriate manner 3. Introducing the strategic investor Yunxi Fund, which is expected to continue to supplement high-quality content and give it a “buy” rating 1. We expect the Internet TV industry to explode in 2017, and the company will continue to maintain a leading position in the country's Internet TV business. Users It covers 80 million households, and the coverage rate is about 50%. 2. Based on the company's excellent business philosophy and the explosion of the Internet industry, we expect the company's EPS in 2016, 2017 and 2018 to be 0.46 yuan, 0.57 yuan, and 0.71 yuan respectively, corresponding PE will be 42X, 34X, and 27X, respectively. Referring to comparable companies and considering the company's future asset injections, we will give a 2017 45X valuation, and the corresponding target price is 25.7 yuan. Risk warning: policy and regulatory risks; industry development falls short of expectations; content pattern changes; terminal pattern changes