Key points of the report incident description 1. The company plans to increase capital by 581,016 million yuan to acquire 69.76% of Kaiming Fashion's shares. The target company, YOKA Fashion Network, is the first new media network platform in China positioned to lead high-end fashion consumption and serve high quality fashion life. The target is to simultaneously operate the mobile version of YOKA Fashion Network and three major apps. 2. The company plans to invest 100% of the shares of the foreign target Smaato Holding AG through a merger and acquisition fund subsidiary, Shanghai Yiqiu, with a cash transaction consideration of US$148 million. Incident reviews have impressive operating indicators, and the explosion of mobile devices has helped Kaiming's fashion advertising business rise. Kaiming Fashion is the most leading media company in the fashion field in China, with Internet advertising as its core business. The company is in a stage of rapid development, mainly based on: 1) The target core user indicators are impressive. In May 2016, PC-side PV, MAU, and daily UV increased by 89.08%, 39.69%, and 67.63% respectively; the number of monthly UV and WeChat followers on the mobile phone network increased by 74% and 29%, respectively; the cumulative number of users who downloaded YOKA's clothing and beauty single app products reached 3.4043 million/times, and the total number of users downloaded HOT men's app products reached 42.079 million/times. 2) Mobile ad delivery is in a period of rapid growth. In 2015, the revenue scale of mobile advertising media increased sharply by 178.3% year on year, and the target mobile advertising business is making a strong start. The announcement predicts that the share of mobile advertising revenue in 2016 will reach 13.52% (only 7.06% in 2015), while the cost of expanding the mobile business is extremely low (marginal cost effect of Internet content), which can greatly increase the profitability of target companies. We are confident that Kaiming Fashion will fulfill its performance commitment of 40 million for the full year of 2016. Open up online and offline, upstream and downstream resources, and complement each other to achieve leaps and bounds in integrated marketing capabilities. The company has covered experiential marketing (leading domestic offline marketing), PR advertising (DIS Media's performance in 2015 greatly exceeded promises), digital marketing (completed the merger and acquisition of the established domestic digital marketing brand Haoye in 2015), content marketing and big data marketing. The advantages are: 1. Rich and high-quality customer resources; 2. Comprehensive integrated marketing product line covering online and offline; 3. Listed company platforms and well-known industry brands. After completing the merger and acquisition of Kaiming Fashion, the company will obtain: 1. Excellent Internet and mobile Internet media resources; 2. High-end consumer base; 3. High-end brand customers. It can not only complement the industrial chain, but also echo the company's entertainment content marketing business. Smaato Holding is the world's leading real-time bidding mobile advertising trading platform. RTB represents the future development trends and technical barriers of digital marketing. If successfully completed, the company will further improve the closed loop of the entire industry chain of data+technology+customer+media. Maintain a “buy” rating. It is estimated that the company's 2016/2017 preparation eps will be 0.32/0.41 yuan, which is 28/22 times the corresponding PE preparation exam. It is optimistic that the industrial layout will continue to advance its potential, and maintain the “buy” rating. Risk warning: Outreach is not progressing as expected, and internal integration falls short of expectations.