The main points of investment revolve around artist agents connecting the entertainment industry chain, covering literature, film and television, education, music, advertising, marketing, and games. The company's layout in the media field is characterized by a broad range, multiple levels, and a combination of extrinsic endogenous activities, but essentially it all follows the trinity development model developed from artistic talent cultivation (art education) — high-quality blockbuster works (IP monetization) for high-quality IP in film and television content and video game intermodal transportation (IP monetization) — artist agents. Currently, in terms of artist brokerage, the company has Qianyi Zhicheng, Ai Qirui, Datang Huihuang, etc., and in terms of artist education, Zhongnan Education and two joint schools. In addition, the company also lays out in other pan-entertainment fields. On the one hand, these actions implement the company's transformation ideas and contribute high gross profit performance to the company; on the other hand, they can be combined with the company's artist development to form a closed loop of industrialization of Star DreamWorks, that is, art college training, influencer development, idol company creation, high-quality IP content derivative grafting. Development and sales are intertwined to consolidate the company's presence in the media The overall competitiveness of the field. The background is rich in resources, and I am optimistic about in-depth cooperation with the Medium-Value Department and Mango Media. The company and Mango Media have successively set up 4 industrial funds, and some of the target companies that Mango Media invests in have followed suit. In fact, the predecessor of Mango Media was Hunan Radio, Film and Television Group. Its high-quality assets include Hunan TV, Happy Shopping, TV and Radio Media, etc. Among them, Hunan TV is recognized as the TV station with the highest ratings in the industry and most loved by young people, and is also a natural star-making platform. At the same time, the company established the Zhongnan Cultural Media Fund with the Chinese Plant Department as early as 2014. China Plant is good at capital management and has rich project resources, and has participated in many listed companies. Currently, Zhongrong Dingxin, an affiliate of the China Plant Group, is the company's second-largest shareholder, holding about 12% of the company's shares. The deep partnership between the company and these two at the capital level gives the market a lot of room for imagination. Mergers and acquisitions resumed, and 90% of Aurora Network's shares were acquired. The company plans to acquire 90% of Aurora Network's shares at a transaction price of about 668 million yuan. The target promises to achieve net profit deducted from mother of 55 million yuan, 68.75 million yuan, and 859.375 million yuan in 2016-2018. We believe that the acquisition of Aurora Network can bring good synergy to the company, mainly reflected in two aspects: 1) Aurora Network focuses on large-scale MMORPG games focusing on mythology, historical and cultural culture, which is more suitable for the development of video game linkage and cultural game linkage compared to medium and light games that focus on interactive games. The company's existing resources are expected to be fully used; 2) By importing high-quality resources, Aurora Network can not only select excellent external game development teams and boost the IP licensing business, but also form a close relationship with 37 Entertainment, the company's leader in page game operation. In fact, the target of the transaction is Tibet Taifu, a subsidiary of 37 Mutual Entertainment. The company and Tibet Taifu participated in the establishment of the Mango Cultural and Creative Fund together before. This time, Tibet Taifu will hold shares in the company, and the future with 37 Mutual Entertainment is worth looking forward to at both the capital level and the business level. Profit forecasting and investment advice. Assuming that Aurora Network is combined in 2017, we predict that the company's EPS in 2016-2018 will be 0.45 yuan, 0.63 yuan, and 0.74 yuan respectively. Considering the company's extensive pan-entertainment layout, promising collaboration, and high flexibility brought about by the film education business, the valuation is 50 times, covering the “buy” rating for the first time. Risk warning: Media industry policies may be tightened, non-public offering or failure to be successfully implemented, risks of marketability of movies and TV dramas, target performance or failure to meet promises, integration and collaboration of various sectors or failure to meet expectations, and systemic risks in the stock market.