1. Overview of the incident. Recently, the company issued an announcement that it intends to acquire 79.25% of Chengdu Guyi's shares in the form of issuing shares and paying cash; to purchase 80% of Beijing's shares in the form of issuing shares and cash capital increases; and to acquire 30% of Shanghai Jiuzhirun's shares in the form of issuing shares and paying cash. In total, it will obtain 100% of Shanghai Jiuzhirin's shares after the transaction is completed. After the transaction is completed, Chengdu Guyi and Beijing Zhangkuo will become the company's holding subsidiaries, and Shanghai Jiuzhirun will become a wholly-owned subsidiary of the company. 2. Analyze and judge the acquisition of high-quality enterprises in the digital reading, mobile marketing, and online game industries, and lay out the entire Internet industry. According to the announcement, Chengdu Guqiang Technology Co., Ltd., which is the target of this acquisition, is a well-known domestic digital reading content provider. The core business of the company is Internet reading. It owns Reading Book Network, a well-known online reading platform in China, with more than 3 million registered users. The content covers online literature IP on topics such as romance, fantasy, urban, martial arts, etc., and has begun to expand audiobooks, animation, games and other businesses based on rich IP resources. We believe that the company's acquisition of Chengdu Guqiang is an expansion of upstream content-side business. Chengdu Guqiang has extensive IP resources, which can not only provide material for the company's film and television production business, games, etc., but also bring a large amount of IP content to the company's internal film and television production and newly expanded game business. 2. Another target of this acquisition, Beijing Zhangkuo Mobile Media Technology Co., Ltd., is a leading mobile marketing platform in Asia. Anwo Media, a subsidiary of Beijing Zhangkuo, specializes in mobile internet advertising. It is the largest mobile advertising platform in China. It has more than 3,000 partner brand advertisers, covering more than 90% of smart mobile terminals in China, cooperating app media with more than 140,000 models, and the DSP+ platform has gathered more than 480 million users, displayed more than 2.5 billion ads every day, and covered more than 120 million users per day. Anwo Media has successfully planned and launched Internet advertisements for Master Kong's Iced Black Tea, Unicom 4G, Mengniu, Audi, etc., and has many high-quality cross-industry advertiser resources. The acquisition of Beijing Zhuangkuo has greatly enhanced the digital marketing capabilities of the Internet, and can form a synergistic effect with other subsidiaries and business segments within the company. With the advantages of Beijing's mobile platforms and customer resources, while enhancing its own new media marketing capabilities, it also opens up markets and channels for business segments such as film and television promotion, content services, and game distribution. 3. The third target of this acquisition, Shanghai Jiuzhirun Information Technology Co., Ltd., is a well-known domestic online game operator. Its subsidiary, Jiuyou.com, is a first-generation Internet game platform in China. It has distributed and operated prestigious mobile game products such as “Strong Dance” and “Mobile Suit Gundam OL”. Currently, Jiuyou.com is still actively developing the mobile game, page game, and mobile game markets; in 2014, it achieved impressive revenue of 364 million yuan and net profit of 91 million yuan. Meanwhile, by acquiring 100% of Shanghai Jiuzhirun's shares, it has successfully developed the game business sector, and while boosting performance, it will further improve the layout of the Internet ecosystem. The future layout of the game industry chain will include businesses such as mobile games, mobile games, page games, and game development. Build a new media media group, pioneering cooperation models. The company has clear ideas about this acquisition, demonstrating the power of the comprehensive layout of the Internet and clarifying the growth path for building a large-scale new media media group. Currently, the company's upstream content end includes the digital reading platform Chengdu Guyi, the Internet game platform Jiuyou.com, and the Internet audio new media platform Jinjidian; the mobile marketing channel platforms include Beijing Zhangkuo, Yifeng Technology, Ekoski, and Jiuzhimanxia. In addition to previous collaborations with Alibaba and Lionsgate, the company has fully established an entertainment giant framework integrating traditional media and new media. It is hoped that in the future, various businesses will develop collaboratively and achieve leapfrog development. 3. Profit forecasting and investment recommendations In recent years, the company has closely focused on the development strategy of “media+investment” and has continued to carry out industrial layout. The business scope covers cable television network operation, venture capital, film and television program content, advertising, tourist hotels and other industries. The company is developing in the direction of a comprehensive media and entertainment group with the “media content+venture capital” business as the two core pillars and the “mobile Internet+big data+advertising and marketing” business as potential support. It is expected that it will continue to make efforts to accelerate the integration and development of traditional media and emerging media in the future. We judge that the transformation and upgrading of state-owned cultural enterprises is the general trend, and that the integrated development of traditional media and emerging media is about to enter an in-depth stage. We expect EPS to be 0.44 yuan, 0.65 yuan, and 0.98 yuan from 2015 to 2017, corresponding to current stock prices PE of 98X, 65X, and 43X. We maintain a “Highly Recommended” rating for the company. 4. Risk warning: 1. The growth rate of the cable television business is slowing down; 2. The return on film and television investment falls short of expectations; 3. Human resources management risks such as the loss of core management personnel; 4. Affected by distribution policies, the progress of venture capital business is blocked.