Investment highlights: Event: It is planned to acquire 73% of Chumi Technology's shares for 1,178 million yuan. On the evening of July 31, the company released a revised version of the asset purchase plan. The company plans to acquire 73% of Chujian Technology's shares through a combination of issuing shares and paying cash. The total transaction value is 1,178 billion yuan, of which the shares will pay 960 million yuan (the equivalent number of shares is 71.4746 million shares based on the issue price of 13.43 yuan/share) and 218 million yuan in cash. At the same time, the company will raise 247 million yuan of supporting capital. The company already holds 27% of the shares in First Sight Technology. After the transaction is completed, First Sight Technology will become a wholly-owned subsidiary of the company. At the same time, the company announced that it will repurchase the company's shares of RMB 200 million at a price not higher than RMB 17.20 per share for use in employee shareholding or equity incentive plans. First Look at Technology: A premium mobile game publisher. First View Technology was founded in May 2014 and is an excellent mobile game distribution operator in China. The company has been the exclusive agent for various high-quality mobile games such as “Three Kingdoms”, “Three Kingdoms”, “Demon Catch”, and “Runaway Dungeons”. The games it has released cover various genres such as role-playing, card, strategy, and sports. In recent years, the company has continued to develop channel service providers and expand channel coverage. Currently, it has reached in-depth cooperation with first-tier channels such as Apple, App Store, Alibaba Games, Baidu, Huawei, OPPO, and VIVO. In 2016, Chujian Technology achieved revenue of 182 million yuan and net profit of 71.951 million yuan; in Q1 2017, Chujian Technology achieved operating income of 72.022 million yuan and net profit of 3.4062 million yuan. First Sight Technology promises that it will achieve net profit of no less than 140 million yuan, 170 million yuan and 210 million yuan respectively in 2017-2019. Improve distribution channels and realize the layout of the entire mobile game industry chain. Tianzhou Culture's main business was originally a book publishing and distribution business. In 2014, the company acquired 100% of the shares in Magic Era, and since then began a transformation in the game field. In 2016, the company also acquired 100% of Youai Network's shares for 1.62 billion yuan, continuing to increase its mobile game business. The company plans to acquire Chujian Technology for 1,178 billion yuan. It will make full use of its channel resource advantages on the mobile game distribution side, achieve good collaboration and complementarity of resource advantages with the company's original subsidiary Magic Era and Youai Network's high-quality R&D capabilities, and improve the company's layout in the entire mobile game industry chain. Profit forecasts and future perspectives. The company's future prospects: (1) Mobile game sector: focus on building the entire industry chain of game R&D, distribution and operation, and business collaboration to promote performance improvement; (2) traditional business and education sector: traditional business continues to transform and upgrade. By controlling people today, it realizes the accumulation and integration of traditional offline education resources and consolidates its dominant position in the field of education publishing. We expect the company's 2017-2019 EPS to be 0.47 yuan, 0.58 yuan, and 0.70 yuan, respectively. (If you consider the full year of the 2017 acquisition of First Vision Technology, the fully diluted EPS corresponding to the latest share capital in 2017-2019 is $0.54, $0.66, and $0.79). Referring to the game industry Century Huatong, Glacier Network, and Xunyou Technology's unanimous expectations for PE in 2017, were 35 times, 40 times, and 103 times, respectively. We gave the company 40 times PE in 2017, with a target price of 18.80 yuan. Maintain the buy rating. Risk warning: There is a risk that the main traditional book business will decline, and the mobile game layout will fall short of expectations.