Key investment points to transform LED companies into digital marketing. The company's original main business was LED packaging and application lighting. In recent years, the LED industry has been fiercely competitive, and the company's profit pressure is high. The company is actively seeking transformation. It plans to invest a total of 740 million yuan to acquire 100% of the shares of Dingsheng Yixuan and Yiwan Wireless, and has already invested 30 million yuan to participate in 21.4% of Botu Advertising's shares to accelerate its entry into the digital marketing field. Digital marketing is a 100 billion market, and industry concentration is expected to increase. 1) The digital marketing market is huge. The domestic market is expected to reach 419.8 billion yuan by 2018, with a compound growth rate of about 20% over the next three years. Internet advertising has become the mainstream form of domestic advertising, and shows the development trend of diversification of marketing forms, diversification of customer types, mobile terminals, and integration of multiple screens. 2) Programmatic purchasing has become an important transaction model in the advertising market. Increased demand for data analysis capabilities, product functions, and service capabilities will raise the industry threshold. Coupled with the emerging trend of mergers and acquisitions in the industry, the digital marketing industry will gradually become concentrated. The company's digital marketing entire industry chain layout is accelerating. 1) Dingsheng Yixuan is a leading domestic home decoration search and advertising service provider. It mainly provides big data, SEM and new media marketing services in the home decoration and 360 real estate and home furnishing industry, with a net profit of more than 30 million yuan in 2015; 2) Ewan Wireless provides one-stop mobile internet marketing services and has cooperated deeply with Internet giants such as Tencent, Baidu, and Jingdong. The net profit in 2015 is about 41.98 million yuan, and has a high level of profit and long-tail traffic integration capabilities; 3) Participating in Botu Advertising is vertical for brand companies and women Industry customers provided full Internet marketing services, and net profit exceeded 10 million yuan in 2015. 4) Dingshengqiang operates hundreds of millions of dollars in search and big data. Botu is good at planning ideas. The three cooperate and complement each other, which is the key layout for the company to build a digital marketing ecosystem. In the future, the company will continue to build a digital marketing enterprise in the entire industry chain integrating creative planning, technology platforms, data mining, wireless distribution, media resources, and customized services for advertisers through mergers and acquisitions. Positioning mid-to-high-end services, increasing LED profitability. The company's LED lighting business has formed cooperation with middle and high-end customers in various fields such as finance, communications, consumption, and media. The products have obtained many certifications at home and abroad, and are self-supplied with light source devices, making the gross margin level of lighting products higher. The acquired Nisshang Optoelectronics promised net profit of more than 50 million yuan over the next two years, which will effectively enhance the profitability of the company's lighting business. Valuation and rating: The company's digital marketing layout is clear, transformation is firm, and the profitability of the LED business has increased. The compound net profit growth rate for 2015-2018 is expected to be 63.7%, covered for the first time, giving it an “increase in weight” rating. Risk warning: the risk that the performance of the M&A enterprise will be achieved or not as promised; the risk of integrating multiple businesses or falling short of expectations; the risk that the original main business or growth rate is insufficient.