Key investment points: The main operating performance is growing at a high level, and the undervaluation value is highlighted. Changjiang Media is a large state-owned publishing, media and cultural industry group in Hubei Province. At the end of 2011, the entire main business was listed. In the past two years, the company's “cost reduction and efficiency increase” has begun to bear fruit, and the main operating performance has maintained a relatively rapid growth rate (performance growth rates of 54% and 82% in 2015 and 2016, respectively). In the first three quarters of 2017, the company achieved net profit of 522 million yuan, an increase of 28.1% over the previous year. As of closing on November 7, the company's PE (TTM) was only 12.5 times, which is at a low valuation level among media companies. The gross margin of business restructuring increased markedly. The gross sales margin for the first three quarters of 2017 was 17.88%, and the net sales margin was 7.88%, up 6.78 bps and 3.94 bps, respectively, from the same period last year. The company's gross profit margin and net interest rate have increased significantly, mainly due to the company's business restructuring. The company has gradually reduced its revenue since this year, but has a relatively high share of revenue, but the gross margin has been lower, and the focus of the business has shifted its focus to the highly profitable book sales business. In 2017 H1, the company's general book sales revenue increased 25% compared to the same period last year. In terms of book distribution business, the company has built a total of 1,140 unit libraries in Hubei Province, and is focusing on building multi-functional integrated physical bookstores to enhance users' consumer experience. The company has now successfully opened many specialty bookstores such as Jiuqiu Bookstore and Changjiang Bookstore. Among them, Oceanwide Bookstore and Jiuqiu Bookstore won the “Most Beautiful Xinhua Bookstore” in the country. In addition to publishing literature, the company is also actively developing the online text market. As of June 30, 2017, the company's online original publishing platform “Changjiang Chinese Network” had more than 90,000 resident works and 5.4 million registered users. The company is now gradually forming a full-copyright operation chain covering digital content, film and television, audiobooks, published literature, and games. Love Cube helped the company lay out its preschool education layout. The company's holding company, iCube, entered the new third board innovation level on May 30 this year, and became the first preschool education enterprise to enter the innovation level. iCube is mainly engaged in the development and promotion of products in the field of preschool education. The product system includes four major sectors: kindergarten courses, children's play teaching aids, preschool education cloud platforms, and kindergarten chains. In recent years, the company has continuously improved the preschool curriculum content system and enhanced its ability to develop teaching aid products for young children (in the first half of 2017, the company's new product has obtained 3 utility model patents and 1 design patent). Thanks to the company's efforts, the number of children enrolled in Aicube Kindergarten has also increased markedly. As of June 30, 2017, the number of children enrolled in the three iCube kindergartens was 366, an increase of 75 children over the end of December 2016. We believe that the layout of the company's preschool education layout is expected to become the highlight of its future performance growth. Profit forecast. We gave the company an EPS of $0.60, $0.67, and $0.76 for 2017-2019. Also, referring to companies in the same industry, Anhui New Media, Times Publishing, and Zhongnan Media expect PE of 18 times, 15 times, and 14 times in 2017, respectively. We gave the company 15 times PE in 2017, with a target price of 9.00 yuan, maintaining the buying rating. Risk warning: The main business of traditional books is declining; the transformation of the education sector falls short of anticipated risks.