Events: (1) Earnings forecast for the first three quarters of 2016, the company's revenue for the first three quarters is expected to be between 60,803.48 million yuan and 65,14659 million yuan, an increase of 180%-200% over the previous year; (2) announced an agreement to acquire a total of 47.33% of Shanghai Wenxi's shares in cash. If the acquisition is successfully implemented, the company will hold 75% of Shanghai Wenxi's shares; (3) termination of planning for major asset restructuring matters and the resumption of trading on October 13, 2016. The strategy focuses on Edsaas, and the “Full Course Cloud+ and Education” dual platform is expected to increase revenue in the first three quarters: in 2016, the Edsaas business moved from a strategic layout into a large-scale promotion period, with significant revenue growth; the home-school interactive upgrade business revenue grew rapidly due to factors such as channel expansion and post-investment collaboration; the investment layout of the continuing education business grew steadily, adding revenue in the current period. The company's revenue for the first three quarters is expected to be 60,803.48 million yuan to 65,14659 million yuan, up 180%-200% year on year. The company's net profit for the first three quarters is expected to be 36.2892 million yuan to 42.8873 million yuan, an increase of 10%-30% over the previous year. Due to the seasonality between the continuing education business and the Edsaas business, we expect the company's profit to increase significantly in the fourth quarter. It plans to acquire 47.73% of the participating company Shanghai Wenxi in cash to explore business collaboration and integration of resources in the Shanghai region: the company plans to buy 18.33% of Shanghai Wenxi Information Technology Co., Ltd. held by Mr. Chen Wenbin and 29% of Shanghai Wenxi Information Technology Co., Ltd. held by Mr. Song Jianyong in cash. The overall valuation range for this transaction is RMB 200 million to RMB 250 million, and the overall performance target for 2016 to 2018 is not less than RMB 57 million. Among them, 2016, 2017, and 2018 were 11 million yuan, 18 million yuan, and 28 million yuan respectively. If the acquisition is successfully implemented, the company will hold 75% of Shanghai Wenxi's shares. We believe this acquisition is conducive to leveraging business synergies and deepening the company's regional layout and operations in Shanghai. Plans for this major asset restructuring have been temporarily suspended, pending full preparations. Trading was suspended on August 15, 2016 to acquire assets in the education information service industry. The estimated transaction amount is between RMB 2.8 billion and RMB 4 billion. It is anticipated that the company and the counterparty will not be able to determine the main contents of the restructuring framework agreement while issuing a notice of the shareholders' meeting to consider the continued suspension of trading and planning the restructuring plan. At the same time, there is great uncertainty about the subsequent schedule of this restructuring and consensus on core terms, etc., and decided to stop planning this major asset restructuring. The company will continue to follow up on the progress of the underlying asset, wait until the transaction conditions are ripe, and then choose an opportunity to initiate related matters depending on the specific situation. Investment suggestions and performance forecasts: Based on (1) the company is the leader in K12 online education in China, and the number of teachers and students in service schools is leading in the country; (2) in 2016, the Edsaas business was focused, the continuing education business was consolidated, and growth was on the fast track; (3) the company actively explored opportunities for extension layout, continuously integrated high-quality targets, and leveraged synergy to strengthen entry advantages, we expect the company's 2016-2018 EPS to be 0.37 yuan, 0.63 yuan, and 0.75 yuan respectively. Referring to the PE level in the same industry, and considering the company's leading edge in the industry and high growth, we gave the company a valuation of 100 times in 2016, corresponding to the target price of 37 yuan, and a purchase rating. Risk warning: the promotion of extended mergers and acquisitions, the growth rate of business development falls short of expectations; the risk of declining profitability, etc.