Revenue was stable, net profit declined slightly, and the main business operation was steady. In the first half of 2016, the company achieved operating income of 3.349 billion yuan, an increase of 2.96% over the same period of the previous year; realized net profit of 317 million yuan to mother, a decrease of 5.48% over the same period last year. Under the downward trend of the traditional paper media industry, the company's traditional business has achieved steady development, new business formats such as digital publishing and digital education have progressed steadily, and the overall operation of the company's business is steady. The publishing business is closely modern-oriented, and the social and economic benefits of quality books are both good. In the era of mobile internet, the company's traditional book sales are under great pressure. In the first half of 2016, the company closely guided the times and published a series of books such as “The Long Journey of the Chinese Workers and Peasants Red Army”, “Sun Yat-sen,” and “General Secretary ****'s Important Speech Series (2016 Edition)”, “Two Studies and One Action” study and education series, and “Endeavour for the Land of the Central Plains”. The publication of quality books on these themes not only achieved social benefits, but also helped the company achieve good economic benefits to a certain extent. The Distribution Group has once again become the sole supplier of textbooks in Henan Province, and future operations are guaranteed; the printing and materials business uses the Internet, and its innovative management performance is remarkable. In terms of distribution business, the company completed a new round of “single source procurement” negotiations for textbooks in the first half of 2016, thus ensuring that the distribution group continues to be the sole supplier of free textbooks in Henan Province from the fall of 2016 to the spring of 2018, which provides a good guarantee for the future operation of the company's distribution business. The company's printing and materials business uses the Internet to innovate business models and strive to optimize the product structure to achieve steady growth in business revenue and profit. Emerging business formats are progressing steadily, enhancing the flexibility of the company's future performance. The company continued to develop new industries in the first half of 2016. In terms of digital publishing, the company's “New Reading Network” stores more than 7,000 types of e-books, and it is expected that tens of thousands of e-books will be stored by the end of the year. In terms of digital education, the company's education cloud platform has been officially built, 12 products of the China Education Publishing Network have entered the e-education textbook procurement catalogue, and the composite digital textbook “High School Study and Guidance” has been distributed to 160 million copies, with remarkable economic benefits. In terms of digital distribution, the company's foreign bookstores have set up 34 physical experience counters in the provincial bookstore system, launched the China MPR Book Network, and established the Cloud Book Network MPR Special Library, making every effort to expand MPR marketing. In terms of online distribution, the company focuses on building a comprehensive e-commerce platform featuring knowledge services with the “Cloud Book Network” as the core. Currently, more than 3 million products have been launched, which has strongly promoted the sales of the company's non-book products. Profit forecasting and valuation. The company's traditional main business is expected to continue to develop steadily in the future. New business formats such as digital publishing and digital education are the highlights of the company's future performance. We expect the company's EPS to be 0.75 yuan, 0.75 yuan, and 0.82 yuan respectively in 2016. Considering that companies in the same industry, Times Publishing, Chinese Media, Zhejiang News Media, and Zhongnan Media unanimously predicted a PE of 17-28 times in 2016. We gave the company 20 times PE in 2016, corresponding to a target price of 15.00 yuan, and gave the company a purchase rating. Risk warning: Risk of decline in traditional main business; risk of falling short of expectations in developing new business formats.