Investment points: Based on the Internet+ transformation of new media, actively building a new engine for performance growth. In the first half of 2016, the company achieved cumulative operating income of 689 million yuan, an increase of 5.00% over the previous year, and realized net profit of 52,316,400 yuan, a year-on-year decrease of 26.63%, mainly due to the decline in investment income during the same period. During the reporting period, revenue from the company's traditional media sector declined, while revenue from non-newspaper sectors such as new media increased. The company used the Internet platform to make every effort to break through the traditional marketing model and integrate the concept of Internet+ into media operations, easing the downward trend in the main business. The advertising planning industry achieved revenue of 324 million yuan, a year-on-year decrease of 6.38%, accounting for 47.08% of the company's main business revenue. The business of the new media company continued to grow rapidly. During the reporting period, it achieved a total revenue of 148 million yuan and the number of users reached 104 million, which became the company's new growth engine. In particular, by serving the core theme of the G20 summit, Hangzhou Network has established its industry benchmark position in terms of website content construction, technical services, and security protection. In addition, the company invested in the establishment of China Media Communications, based on the video integration platform “Enlightenment Connect”, and is committed to making it an important platform for the future mobile video field. Promote management through marketing and actively consolidate the revenue of the advertiser business. During the reporting period, the company put customer needs first and used event planning to increase advertising. In May, Hangbao Media held three major exhibitions in a row: the Mahogany Show, Baima Lake Auto Show, and the Children's Fair. Brand influence was further enhanced; Daily Media created a comprehensive promotion plan for the “Yishan County” project, which realized full media interaction between newspapers, outdoor screens, the Internet, and WeChat mobile; Express House Network continued to increase advertising revenue through several events such as the Chengbei Tulip Show; Xiao Pao Media China (Hangzhou) Media Innovation Cooperation Project Exchange Conference achieved remarkable results; Yu Morning Post vigorously promoted all-media marketing, using WeChat and other mobile devices to speed up the layout of new media; Integration of Fu Pao Media's rich brand series brand activities The user resource advantages of “Happy Fuyang” created a record of doubling revenue in the first half of the year compared to last year; Fengsheng Media focuses on the outdoor advertising industry and continues to develop new high-quality media resources based on the advertising business of major subway lines in Hangzhou, expanding its business lines, and improving performance. Acquire the future of Chinese education, seize the dividend opportunities of vocational education policies, and successfully enter the field of education. During the reporting period, the company acquired 60% of Beijing China Education Future's shares. With China Education's deep accumulation in the field of vocational education over the next 10 years, and taking advantage of the large-scale explosion of policy dividends, the company has continuously expanded its business scope to cover many important cities across the country. At the same time, it has established long-term friendly and cooperative relationships with famous universities in these cities, further enhancing the future profitability of China Education, making it a new performance growth point for the company, and promising development prospects. At present, the future of Chinese education has implemented 3 vocational education programs, 2 international education programs, and 2 art education programs; the IT education project has also been approved by more than 10 colleges and universities, covering many provinces, cities and regions across the country; the Qinghai National Training Program and Fujian Quanzhou Teacher Training won the bid for two online education projects, which have now entered the implementation stage. As the number of the company's future partner institutions continues to increase and the number and scale of enrollment continues to rise, we expect the future performance of Chinese education to usher in explosive growth. Profit forecast. The company's future highlights: 1) Positioning the “mobile Internet +” strategy, focusing on self-build+acquisition, focusing on mobile video terminals, while accelerating the integration and development of traditional print media and new media to create the most fully integrated media cluster; 2) Leveraging the power of the capital market to enter the IP industry chain through various means such as acquisitions, mergers, capital increases, and fund formation, and accelerate the reserves of high-quality IP content to make up for its own content shortcomings; 3) Acquire China Education in the future to promote vocational education, expand new business, and seize major development opportunities in the education industry to achieve transformational development. The 2016-2018 EPS is expected to be 0.24 yuan, 0.26, and 0.30 yuan, respectively. In the same industry, in 2016, Publishing Media increased 61.36 times PE (traditional media company), and Weichuang Co., Ltd. increased 68.86 times PE (education company). We gave the company a valuation of 60 times in 2016, with a target price of 14.40 yuan, and maintained the buying rating. Risk warning. The future performance of China Education falls short of expectations; the profitability of traditional businesses continues to decline.