Incident: The company disclosed its 2013 performance report, with revenue of 1,672 million yuan and net profit of 313 million yuan. The year-on-year changes were -11.1% and 13.72%, in line with expectations. We have a different view from the market: we think we can pay attention to two highlights of Guangdong media recently: (1) Yuncai has entered the final testing period, and professional information analysis capabilities are expected to achieve the first batch of “Football Lottery Winners”. The customer base is huge. (2) The 14-year Champs-Elysées is expected to be successfully combined, and the LED screen rate enters the “new screen interaction” era, and the performance is strong. According to the performance promise, the 14-15 EPS will increase by 0.08 yuan and 0.1 yuan respectively; we believe that 2014 is the transformation year of Guangdong Media, and many businesses of old and new media are on the market. row work. Although the related business did not contribute much to profits within 1-2 years, as long as the transformation process meets expectations, the company can soon be established as a comprehensive media group integrating distribution, print advertising, and new media. We are strongly optimistic about the Guangdong media and maintain a “strong recommendation”. Key investment points: Revenue from traditional paper media has declined significantly, and open source savings support profit expansion. Affected by the decline in macroeconomic growth and the impact of the new media business, the company's revenue fell -11% in 2013, which is comparable to the contraction of the industry. However, due to open source resources in the new media business and cost savings, the company achieved annual net profit of 313 million yuan, a year-on-year growth rate of 13.72%, which is basically the same as last year. New media progress has accelerated, and the sports lottery app has entered the final testing period, and we look forward to enjoying the World Cup feast: (1) The popular teams in this year's World Cup are all in the death group, and soccer enthusiasm will further boost soccer lottery growth. It is expected that the growth rate of quiz lottery tickets is expected to break through the 102% level in 2010; (2) Relying on the millions of loyal readers of “Soccer News”, it is expected that the first batch of lottery fans will have a huge customer base to connect with customers. Assuming that 20% of readers successfully connect, buy 100 yuan of lottery tickets every week, and get refunded according to 7% lottery revenue, the company's gross profit can reach 72.8 million yuan, and the business prospects are impressive; (3) “Soccer News”'s professional information team is the core competitiveness of the platform. The Champs Elysées has entered an era of “human screen interaction”, and new media displays have increased the room for publication prices. Compared with ordinary large outdoor LED screens, in addition to dynamic video display, the Champs Elysées perfectly integrates “large outdoor LED screen+network technology+mobile internet technology” in the innovative application process. By scanning the QR code on the large LED screen, it directly enters the brand's official website and obtains product and promotional information, making the connection between the media audience and the LED screen closer, creating a “new era of screen interaction”. The location of the large outdoor screen of the Champs Elysées is excellent, and the publication rate is among the highest in the industry. According to estimates, every 0.1 yuan increase in publication price will contribute 7% to the Champs Elysées. According to the gambling agreement at the time of the merger and acquisition, the Champs Elysées profit for the next three years will not be less than 56.83 million yuan, 68.7 million yuan, and 81.56 million yuan, with an average growth rate of 20%. Considering the integration of the resources of the two companies and the incentive mechanism for execution after the merger and acquisition, we think it is more likely that the results will be completed. Stock locking time is different, and there is still room for support in stock prices. The listed company completed the restructuring process in 2012. After the transaction was completed, the majority shareholders' rights promised not to be traded or transferred for 36 months until June 19, 2015. Therefore, during this period, although Guangdong Media's stock price has risen a lot, the majority shareholders will not reduce their holdings on a large scale due to limited shares, which is beneficial to the company's stock price. Profit forecast and valuation: Assuming that Guangdong Media successfully completed the Champs Elysées merger and acquisition in 2014, and that the share capital increase to 725 million shares is taken into account, and the acquisition of Champs Elysée will increase EPS by 0.08 yuan and 0.1 yuan respectively in 14-15. We expect the company's 14-15 exam preparation EPS to be 0.49 and 0.56 yuan, respectively, corresponding to 43 and 37 times PE. The estimated target price is 26 yuan, continuing to give it a “Highly Recommended” rating. Risk warning: The performance of the merger and acquisition targets fell short of expectations, and subsequent integration work was poor; Community Report construction work fell short of expectations, local advertising revenue declined sharply; progress in the new media business fell short of expectations, etc.