In 2013, the company achieved operating income of 324 million yuan, an increase of 75.4% over the previous year; operating profit of 60.29 million yuan, an increase of 16 times over the previous year; net profit attributable to owners of the parent company was 51.03 million yuan, an increase of 205.7% over the previous year; and basic earnings per share of 0.20 yuan. Distribution plan: Pay 0.2 yuan (tax included) for every 10 shares.

We believe that the main reason the company achieved high profit growth during the reporting period was: 1) The newly acquired companies Meifeng Digital and Sumo Technology merged, and profits increased significantly. During the reporting period, Meifeng Digital's consolidated profit was 18.449,600 yuan, and Sumo Technology was 7 million yuan. After excluding consolidated profit, the company's net profit was 25.5778 million yuan, an increase of 53.23% over the previous year. 2) The original business is improving, and endogenous growth is relatively stable. During the reporting period, the three mobile game products developed by the company for many years, including “Dream Garden” and “Three Kingdoms Ranger”, all entered the trial operation stage. At the same time, the company seized the opportunity of rapid development of Internet mobile games and launched various mobile game products one after another starting in the second half of 2013, and the company's business operations are on the right track. 3) Expenses are properly controlled. During the reporting period, the company's website games and mobile game products both entered a stage of steady operation. Advertising expenses were reduced accordingly, and the sales expenses ratio decreased 19.42 percentage points over the same period last year.

Find growth points in the mobile market. The company is currently gradually shifting its business investment from client-side games to the mobile phone business. The share of revenue in the mobile game business has risen from 6.06% in 2011 to 27.72%. The wholly-owned subsidiary “First Game Interactive” specializes in self-development, self-delivery, agency operation, and distribution of mobile games, so we believe that the highlight of the company's 2014 business is still the mobile game business: 1) Vigorously developing the development business of the mobile game business. We believe that in 2014, the company will further increase its investment in agency and operation of mobile games and continue to seek cooperation with domestic first-tier developers. In terms of subsequent storage of mobile game products, the company has now stocked no less than 15 high-quality mobile game products, which are expected to be launched one after another in 2014. 2) Acquire mobile game companies to strengthen business strength. The company transferred 51% of the shares of Meifeng Digital and Sumo Technology for 357 million yuan and 87.47 million yuan respectively in 2013, and the company's performance will increase significantly after the 2014 full-year merger. We believe that this year the company may continue to extend its mergers and acquisitions route and acquire better qualified game development companies to strengthen its R&D capabilities.

Profit forecast: We expect the company's earnings per share for 2014-2016 to be 0.46 yuan, 0.78 yuan, and 1.24 yuan respectively. Based on the calculation of the stock price of 29.52 yuan on March 4, the corresponding dynamic price-earnings ratios will be 64 times, 38 times, and 24 times respectively, maintaining the company's stock growth rating.