Key investment points The main income has been growing steadily, and the growth rate of net profit is in line with expectations. In the first half of 2016, the company achieved operating income of 1,287 million yuan, an increase of 4.47% over the previous year, and realized net profit attributable to owners of the parent company of 112 million yuan, an increase of 24.13% over the previous year. The company's main revenue growth rate remained steady. Among them, the video business grew steadily, and data businesses such as personal broadband and group private networks developed rapidly; the net profit growth rate was in line with market expectations, mainly due to revenue growth exceeding cost growth during the reporting period, and the slowdown in fixed asset depreciation growth, management expenses and financial expenses. Network construction continues to advance, and data services are developing rapidly. In the first half of 2016, the company's video business revenue was 768 million yuan, an increase of 4.16%; data business revenue was 233 million yuan, an increase of 9.59%. The company's data business accounted for 18.1% of revenue. The company continues to promote network coverage and two-way network transformation and construction. As of the end of June 2016, the company had 5.6 million digital television users, including 1.46 million high-definition interactive users; 6.56 million two-way network access users; and 800,000 personal broadband users. In July 2016, the company was included as a pilot unit for wired and wireless integrated networks by the State Administration of Radio, Film and Television to develop wireless network business through integrated network construction. We believe that as the company continues to promote network construction, data services such as personal broadband, group private networks, and wireless networks are expected to develop rapidly and become new revenue growth points for the company. Actively transform integrated media and join forces with CCTV to create a special content section. The company is deployed in various fields such as content, networks, services, and applications, and the strategy of transforming into an “integrated media operator” is gradually being implemented. At the service level, the company has built 17 smart community projects and developed service projects such as TV medical care and television education. At the data level, cooperate with Guanghuan Xinwang to operate Internet data services, and carry out network interconnection cooperation with the five northwest provinces. At the terminal level, it cooperated with Shanghai Wenguang, a subsidiary of Oriental Pearl, to launch a high-definition interactive business. Since its launch in June, the number of users has exceeded 30,000. The company is actively developing the content industry. In August 2016, the company signed a cooperation agreement with CCTV, obtained exclusive coverage and transmission rights for various CCTV channels in Shaanxi, and introduced a variety of quality programs in the “CCTV Zone”. In August 2016, the company changed the name of its wholly-owned subsidiary Hope Online to Silk Road Film and Television, creating an important platform for the content sector. The company invested in filming a series of products such as movies, TV dramas, online dramas, and documentaries, and focused on cultivating the content industry. Capital operations are gradually being carried out, and the reform of state-owned enterprises is worth looking forward to. The company is a pilot unit for cultural state-owned enterprise reform, and hopes to become a platform for resource integration and capital management in the radio and television system in Shaanxi. In June 2016, the company's fixed growth plan was approved to raise funds for network construction and bank loan repayment. The company cooperates with Dingzeng participants in “capital+project”: develops “smart city” business cooperation with Tongfang Co., Ltd.; develops high-definition interactive business with Oriental Pearl; and cooperates with Jebsen Co., Ltd. to build a smart education cloud platform. We believe that the company will accelerate the transformation from a “traditional cable operator” to an “integrated media operator” through the “industry+capital” two-wheel drive. risk factors. Data business fell short of expectations; cable reform and transformation fell short of expectations; market competition risk. Earnings forecasts, valuations and investment ratings. We maintain the company's 2016-2018 EPS performance forecast of 0.29/0.41/0.52 yuan. The current price is 14.64 yuan, which corresponds to 50/36/28 times PE in 2016-2018. Considering the company's industry and future transformation to integrated media, we selected Huashu Media, TV and Radio Media, etc., which have a deep transformation layout, as comparable companies, and gave the company a market value of 0.2 million yuan for a single user. It is estimated that by 2017, the company will have 6.3 million users, corresponding to a market capitalization space of 12.6 billion yuan in 2017 and a corresponding target price of 20.45 yuan, maintaining the company's “buy” rating.