Key points of the report describe the incident description Quantong Education announced the forecast for the 2016 three-quarter report. The main data is as follows: Incident review revenue increased rapidly, and losses were reversed year-on-year in a single quarter in the third quarter. During the reporting period, the company achieved consolidated revenue of 610 million yuan to 650 million yuan, an increase of 180%-200% over the previous year, and realized net profit of 36.289 million yuan to 42.887 million yuan. Benefiting from the performance of the Continuing Education Network and various home-school interactive channel companies acquired in the past year, the company achieved consolidated net profit of 554.86 million to 66.5883 million yuan. Furthermore, since the third quarter covered vacations and multiple holidays, the company only achieved net profit of 3805-6.985 million yuan in the third quarter, compared with the same period last year. It shows an improvement in the progress of profit release. Furthermore, the impact of non-recurring profit and loss on net profit for the first three quarters of 2016 is estimated to be 6.5 million yuan to 7.5 million yuan, compared to 536,400 yuan for the same period last year. Increase capital in Shanghai Wenxi to accelerate the deployment of EDSaaS. If the company plans to buy 18.33% of Shanghai Wenxi's shares held by Mr. Chen Wenbin and 29% of the shares held by Mr. Song Jianyong in cash, the company's share of Shanghai Wenxi's shares will increase from 27.67% to 75%. Based in Shanghai and covering East China and South China, Haiwenxi provides nearly 1,000 schools and education departments with full-process integrated digital campuses, digital teaching, and education informatization consulting services. Among them, it has served more than 200,000 students in more than 120 schools in Shanghai in the highland of education. On the one hand, this capital increase has provided mature experience in large-scale promotion and operation services for Quantong Education's EDSaaS business, and on the other hand, it has helped the company to deepen the market in Shanghai and further strengthen its brand. In addition, it can also effectively increase the company's performance. Shanghai Wenxi promised that the overall performance target for 2016 to 2018 will not be less than 57 million yuan. Among them, it was 11 million yuan in 2016, 18 million yuan in 2017, and 28 million yuan in 2018. The company's 2016 corporate strategy revolved around the “Full Course Cloud+ and Education” dual platform. Currently, the company's Edsaas business has been heavily invested, moving from a strategic layout to a large-scale promotion period. We expect that the performance release pilot will be imminent. Although the announcement terminated major asset restructuring due to factors such as transaction consideration, etc., it has already shown the company's determination to expand and strengthen through internal and external extension. As the purest target of Internet education in A-shares, Quantong Education is scarce and remains recommended. Risk warning: The promotion of EDSaaS-related products and services falls short of expectations, and market competition is fierce