Report Summary: The company announced its 2016 semi-annual report. During the reporting period, the company achieved operating income of 581 million yuan, a year-on-year decrease of 19.88%; net profit of net profit of 31.5719 million yuan, a year-on-year decrease of 45.83%; and EPS of 0.03 yuan. People's Online's half-year performance declined year on year, mainly due to the fact that traditional advertising services and mobile value-added services fell 10.4% and 27.07% year on year. At the same time, people's Australian visitors did not generate revenue in the context of the Internet lottery policy not being liberalized. People's Online has closely followed the trend of media transformation, and has blossomed in all lines of business, such as the transformation of new media, publicity and reporting on major events, and internal and external publicity. The “People's Online, the Communist Party of China News Network, and the Mobile People's Network” three networks have been revised; focusing on interpreting General Secretary ****'s speeches and major visits; actively planning publicity reports on major themed events; the total number of followers of the three major microblogging platforms of People's Online has reached over 71 million. In the two authoritative rankings of “Internet Communications” magazine and the Qingbo Index, the daily list, weekly list, and monthly list have always ranked first among online media microblogging accounts in the country. The number of followers on overseas social media platforms surpassed 23 million, an increase of 175% over the previous year. The main business lines continue to expand, and there are many highlights of holding subsidiaries. The company signed a “Strategic Cooperation Agreement” with Shanghai Newspaper Group; participated in the shareholding system reform of Chongqing Hualong Network Group Co., Ltd. and invested 49.9 million yuan to increase the capital of Hualong Network to obtain 4.99% of its shares; subsidiaries such as People's Online, Global Network, Overseas Network, and People's Video performed well. Expectations are strong for the Internet lottery to restart, and the people of Australia can look forward to the future. Results for the reporting period declined year on year. Apart from loss of control over the company due to the sale of some shares in Microscreen Software and a decline in revenue due to a reduction in the scope of the merger, the People's Republic of China and Australia did not generate revenue due to the policy of suspending internet lottery tickets. Mutually beneficial online lottery has been liberalized. As a state-owned enterprise involved in internet lotteries, the people of Australia are expected to make efforts in internet lotteries, and the future can be expected. Profit forecast and investment rating: The company's advertising and promotion business was significantly affected by the advertising industry, and performance declined; mobile value-added services showed a year-on-year decline in subsidiary performance, mainly due to increased competition in the digital reading market, operator base business adjustments, and net network restructuring action factors; information services grew steadily, and the Internet lottery policy could be expected. We predicted that the company's 2016-2018 EPS would be 0.21/0.29/0.35 yuan, maintaining the “increase in holdings” rating. Risk warning: traditional business development falls short of expectations; Internet lottery policies will not be liberalized in the short term.