Key investment events: The company released its 2017 semi-annual report. Comment: Performance is in line with expectations, and continued mergers and acquisitions to increase profits. 1) 2017H1 achieved revenue of 363 million yuan, a year-on-year increase of 51.75%; achieved net profit of 110 million yuan, a year-on-year increase of 52.40%, and the sharp increase in revenue and profit was mainly due to the merger of Youai Network; 2) The 2017H1 mobile online game business achieved revenue of 234 million, an increase of 149.03% year-on-year, accounting for 64.46%, a significant increase of 25.12 pcts over the same period last year, surpassing the original book publishing and distribution business; 3) The gross profit margin of the mobile online game business was 77.77%, down from the previous year 14.97pct is mainly due to the increase in operating costs of the new Youai Network and the cost of existing game business channels. The mobile game industry chain layout has been strengthened, and products are becoming more and more abundant. 1) Some shares of Magic Age, Youai Network, and Chujian Technology have been acquired. This time, the remaining 73% of Chujian Technology's shares have been acquired to help improve the mobile game industry chain layout; 2) Nearly 10 games such as “Crouching Tiger Hidden Dragon 2,” “Supreme Master,” and “The Rise of the Qin Empire” from the company's R&D reserves will be launched one after another in the second half of the year, and the flow can be expected; 3) The “Taikoo God” mobile game adapted by the company will be launched simultaneously with the TV series of the same name, which is worth looking forward to. Profit forecast: The company's net profit for 2017/18/19 is expected to be 360/4.34/519 million yuan. Considering the merger and acquisition of Chujian Technology, the company's fully diluted EPS is 0.54/0.65/0.78 yuan respectively (EPS is 0.43/0.51/0.62 yuan without considering the merger and acquisition of Chujian Technology in the report), corresponding to the current stock price PE 23/19/16 times, respectively. I am optimistic about the company's continued mobile game industry chain layout and give it an “increase in weight” rating. Risk warning: The company's mobile game development progress and flow fell short of expectations; the competitive landscape of the industry intensified.