Investment highlights: From January to September 2016, the net profit of Guimu increased by 10%-30%. On October 12, the company announced that ① From January to September 2016, consolidated revenue was 608-651 million yuan, an increase of 180%-200% over the previous year; net profit of the mother was 3628.92-42.8873 million yuan, an increase of 10%-30% over the previous year. Among them, net profit of 385,500 yuan to 6.975,500 yuan was realized in the third quarter of '16, and a loss of 654,200 yuan in the same period last year. The rapid increase in revenue in the first three quarters was mainly due to the fact that the Edsaas business moved from a strategic layout to a period of large-scale promotion, with significant revenue growth; the company's investment in continuing education business grew steadily, etc. Cash acquires 47.33% of Shanghai Wenxi's shares, and it is planned to acquire Chen Wenbin's 18.33% shares in Shanghai Wenxi and Song Jianyong's 29% shares in Shanghai Wenxi by means of cash payment. After the acquisition is completed, the company will hold 75% of Shanghai Wenxi's shares. Shanghai Wenxi's performance promises 2016 results (based on the lower of net profit and audited net profit after deduction) of 11 million, 18 million in 2017, and 28 million in 2018. First, the acquisition will promote the company and Shanghai Wenxi to further promote EDSaaS business collaboration and help advance the core strategy; second, it will help the company deepen its layout and operation in the Shanghai regional market, further strengthen the brand, and play an exemplary role; third, it will further strengthen the company's R&D capabilities. Multi-dimensional traffic entry points are strong, tied resources to improve comprehensive service capabilities, and the company's four major sectors of home-school interactive upgrading, e-SaaS, continuing education, and subject further education services develop in an orderly manner. The first three business modules will, on the one hand, help the company further improve the national traffic portal layout, and on the other hand, help the company bind high-quality resources. Maintaining a “buy” rating, Quintessential Education is a high-quality enterprise operating the entire business of “platform application+service expansion+content value addition” under the education industry reform. In light of the company's performance growth and progress in extended expansion that fell short of expectations, we lowered our earnings forecast. Given that the core of K12 online education is to use the Internet to improve the efficiency of in-school education, the company's education informatization is being promoted simultaneously through the government bidding PASS project+ED-SaaS project, using academic evaluation to grasp the in-school data of K12 students, using Continuing Education Network/China Education Online to target teacher resources, and subject further education services as a later driving sector. After strengthening the stickiness between schools and users, we will continue to develop more customized education ecosystems based on big teaching data, and actively build an education ecosystem. We maintain purchase ratings and give a certain valuation premium, we expect EPS for 16-18 to be 0.23, respectively. Yuan, 0.34 yuan, and 0.43 yuan. The current stock prices corresponding to 16-18 PE are 119x, 79x, and 62x, respectively. Risk warning: the company's performance growth fell short of expectations