Key investment points: LED packaging companies resolutely transform digital marketing. Established in 2002, Wanrun Technology is a leading domestic provider of medium- and high-end LED light source device packaging and LED application lighting products integrating R&D, design, production and sales. The company provides customers with “integrated” solutions for high-quality LED light source devices and LED application lighting products. Since 2013, the LED industry as a whole has experienced a situation where revenue growth has not increased without profit. For the company's future development and continued competitiveness, the company decided to transform digital marketing. Dividing the digital marketing giant cake began with the acquisition of Nissho Optoelectronics. The company is firmly optimistic about digital marketing: sufficient market space; a rapid growth trend; and a relatively stable and clear business sector in the Internet field. In August 2014, the company acquired 100% of the shares of Nisshang Optoelectronics. Nisshang Optoelectronics is a leading enterprise in the field of LED advertising and signage lighting in China. It is a downstream LED enterprise. It is mainly engaged in outdoor advertising and lighting systems for airports, train stations, etc., and decided to transform into the digital marketing field this year. The acquisition of Nisshang Optoelectronics will help the company quickly enter the LED advertising and lighting specialty market, achieve resource sharing and complementary advantages, enhance the core competitiveness of the company's lighting business, and achieve leapfrog development. “Two in one” is beginning to show ambition, with the intention of building an ecological chain for the entire digital marketing industry. In November of this year, it was announced that the company plans to acquire 100% of the shares of Dingsheng Yixuan and Yiwan Wireless. At the same time, it also participated in Botu Advertising. The three Internet companies it has invested in are mainly engaged in advertising business. Therefore, in order to accelerate the development of the entire digital marketing industry chain of “upstream creative planning - data mining (DSP) - advertising - media”, the company's key future mergers and acquisitions are the three directions of creative planning, DSP, and media. Company recommendation logic: 1) Transform digital marketing on the basis of the original LED business. The LED business will become a stable source of revenue and profit, and in the future, independent teams will be used to launch digital marketing business. 2) Strong team execution and effective development of new business. The company has two M&A teams, two investment directors, and 8-10 main M&A personnel. Among them, the investment director, Mr. Huang Gang, is a professional in Internet communications. 3) Stable team structure, bundled interests. The company issued 700 million dollars privately in April, of which 400 million were subscribed by controllers, company executives, and middle management. The company's development team has full confidence. The recent reduction in shareholders' holdings is due to non-company-level factors and is a personal act. Profit forecast and valuation analysis: The company's original LED business is growing steadily, and the new digital marketing business is expanding. We expect revenue for 2015-2017 to be 1,011 million yuan, 1,560 billion yuan, and 1,720 million yuan respectively; net profit to mother will be 112 million yuan, 168 million yuan and 186 million yuan respectively, corresponding to the diluted EPS of 2015-2017 of 0.46, 0.69 yuan and 0.77 yuan respectively. The valuation level given to the company's industry average is 71 times PE in 2016, with a target price of 48.99 yuan, and an increase in holdings rating. Risk warning: The company's digital marketing business is falling short of expectations.