I. Overview of events

Recently, Lianjian Optoelectronics issued a semi-annual performance forecast for 2017: the net profit of shareholders belonging to listed companies from January to June 2017 is expected to be 175 million yuan to 215 million yuan, an increase of 21.94% compared with the same period last year.

II. Analysis and judgment

The performance of China News is expected to be high, and the integration of Intelligent Marketing Service Group is smooth.

1. China report results continue to grow: the net profit of shareholders belonging to listed companies is expected to increase by 21.94% and 49.82% from January to June 2017; (2) Q2 has a year-on-year increase of 25.59% and 71.75% in a single quarter. The reasons for the continuous growth of the company's performance include: (1) the steady development of the company's main business, the expansion of the three major sectors of digital display equipment, digital marketing and digital outdoor, and the enhanced ability to obtain orders; (2) the company's intelligent marketing service group has been formed. the overall service capacity continues to enhance, profitability continues to increase.

2. We believe that the company has built an integrated marketing service group with digital display equipment, brand public relations service and outdoor media network as the core, and the synergy effect of the three major businesses is obvious, and the comprehensive marketing service ability is further improved. profitability is further enhanced.

Buy iPu new media plus mobile advertising, participate in blue sea purchase to expand real estate, and enhance the competitiveness of digital marketing. 1. The company plans to acquire Epp new media that focuses on mobile advertising business. it is mainly engaged in the promotion of comprehensive self-media matrix as the carrier and the advertising promotion based on the mobile marketing big data platform "Cloud Rubik's Cube". The company plans to invest 110 million yuan to buy 25.88% of the shares in Lanhai. The main business of Blue Sea purchase includes real estate marketing services and the acquisition of real estate sales rights.

2. We believe that the acquisition of Epp New Media will further improve the company's advertising big data platform, strengthen the company's mobile Internet marketing service capabilities, and enhance big data's cash ability of the company's digital marketing business. Blue Sea Purchasing has rich customer data and real estate developer customer resources, which is conducive to the expansion of the company's real estate digital outdoor advertising business. The real estate, asset operation, urban expansion and industry resources of Lanhai purchase are in line with the strategic layout of the company's integrated marketing service group.

The shares of the employee stock ownership plan come from the company's share buyback, which takes a long time to unlock, demonstrating confidence in medium-and long-term development.

1. In June, the company completed the first phase of the 2017 employee stock ownership plan, repurchasing 2194569 shares of the company with an amount of 44998595.9 yuan, accounting for 0.3576% of the company's total share capital, with an average transaction price of about 20.4984 yuan per share. The total funds of the second phase of the employee stock ownership plan in 2017 are capped at 195 million yuan, with no more than 100 employees participating in the plan.

2. The employee stock ownership plan takes a long time to unlock. The lock-up period of the first phase of the employee stock ownership plan is 12 months, 24 months, 36 months, 48 months and 60 months respectively after the completion of the transfer. After 12 months from the date of completion of the transfer, the underlying stock is unlocked in five phases, with a unlocking rate of 20% each time. The lock-up period of the second phase of the employee stock ownership plan is 12 months and 24 months respectively, and the unlocking ratio is 50% and 50% respectively.

3. We believe that the two-phase employee stock ownership plan comes from the shares repurchased by the company, which will have a positive impact on the company's stock price: the first phase will take a long time to unlock, which will help to attract and retain talent and help the company's long-term development; the second phase has a wide coverage and large scale. help to stimulate the enthusiasm of the company's core employees and enhance the company's endogenous development motivation.

LED display devices continue to launch new products, leading the trend of innovation in the industry. 1. During the reporting period, the company released the latest RA series of leased LED screens and V ·Me series of small spacing LED screens, which can be used in stages, exhibitions, TV stations and other scenarios, as well as power, transportation, smart city, studio and other application scenarios.

3. We believe that the release of the company's LED new products will help to enhance the company's competitiveness in the LED display market, combined with the European subsidiary Artixium's industry resources in culture and sports, will be able to consolidate and develop major customers.

Third, profit forecast and investment suggestions

Considering the implementation of the employee stock ownership plan in 2017, the exercise price of equity incentive is 24.40 yuan per share on May 17, 2016, and the current stock price is highly secure. It is estimated that the EPS of the company from 2017 to 2019 is 0.97,1.12 and 1.26 yuan. Based on the flexibility of the company's performance growth, the company can be valued at 30 to 35 times in 2017 and a reasonable valuation of 29.10 yuan to 33.95 yuan in the next six months, maintaining the "highly recommended" rating.

Fourth, risk tips:

1, the performance of the acquiring company is not as expected; 2, the business integration of subsidiaries is not as expected; 3, the competition in the industry is intensified.