Key investment points: The main publishing business scale continues to expand, and the market share is steadily increasing. The company consolidates the market and stabilizes the foundation for development through various means such as improving content quality and printing quality, strengthening training and improving service levels. The “High School New Curriculum Study Guide” series, which was compiled in collaboration with Shandong Tiancheng Company, was reviewed by the Provincial Department of Education; the Science and Technology Society focused on nursing majors, promoted the construction of three-dimensional textbooks for nursing majors, and launched the Nursing Cloud Academy project; the Farmer's Club cooperated with the Provincial Government Emergency Office to develop the “Prevention and Emergency Handbook” around public cultural services of government departments; and published “Le Xiaotian and His Partners”, a book for left-behind children, which has reached more than 500,000 volumes. The market share of the publishing business has been growing steadily. New progress has been made in digital transformation, and the construction of the company's website group and platform is becoming more and more perfect. The content quality, user experience, and brand influence of websites such as China Education Publishing Network, Opera Publishing Network, Martial Arts Publishing Network, Perfect Handmade Network, and China Sannong Publishing Network have continued to improve, and the number and depth of user visits have further increased. The company's “three centers” and “five platforms” functions were further improved, and China Reading Network was successfully tested and launched, and the company's system automated submission of contract documents, automated authorization, and self-publishing was realized. China Education Network has completed research and development of educational informatization products such as mobile learning terminal products “Pocket Academy”, “Smart Educator Access Solution”, and “Teacher Training and Evaluation System”. The global ranking has reached within 50,000, and has gradually expanded to “Internet+ Education”. Strengthen channel construction and continuously improve marketing capabilities. The distribution group has adopted various effective measures to strengthen channel construction: (1) Raise the level of chain operation. By carrying out various themed marketing activities to enhance operation and service capabilities, and effectively seize holiday sales opportunities; (2) fully launch mobile supply and full staff marketing, and plan provincial out-of-store sales activities such as “National Reading Culture Corridor” and “Reading Grow with Me”; (3) Yunshu Network strengthens e-commerce platform positioning, relying on the offline physical channel network of Xinhua Bookstores and the “Yunshu Network” e-commerce platform in Henan Province, has fully launched the e-commerce layout of bookstores in the province, and the number of online service products launched online in rural areas with an average of 2,000 people per capita Reached 26 More than ten thousand varieties. Deeply lay out “Internet +” and strive to upgrade digital products. Profit forecast. The company adheres to the overall strategy of “scaling up, restructuring, promoting transformation, and building a brand”, and has steadily increased its business scale and market share. At the same time, on the basis of consolidating and developing traditional main businesses, we will firmly grasp development opportunities, actively lay out the “Internet +” field, and promote the upgrading of digital products. Furthermore, the company earnestly fulfills the social responsibilities of state-owned cultural enterprises, always adheres to the correct publication orientation, and puts social benefits first. We expect the company's EPS to be 0.75 yuan, 0.75 yuan, and 0.81 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 15 to 26 times in 2016. We gave the company 20 times PE in 2016, corresponding to a target price of 15.00 yuan, to increase the rating. Risk warning. Risk of transformation falling short of expectations; risk of declining profitability; risk of economic downturn.