Matters: On the evening of October 22, 2018, Baiyang Co., Ltd. released its 2018 three-quarter report. Comment: Main financial data: Education subsidiaries also increased their performance. The 18-year performance guidelines were in line with expectations for the 2018 Q3. The company achieved revenue of 1.03 billion yuan, an increase of 41% year on year; realized net profit to mother of 80 million yuan, an increase of 123% year on year; realized deducted non-net profit of 82 million yuan, an increase of 150% year on year. The sharp increase in revenue and profit for the current period was mainly due to the merger of the subsidiaries Mars Era and Kaimao Vision in August 2017 and June 2018, respectively. In Q1-Q3 2018, the company achieved revenue of 2.76 billion yuan, a year-on-year increase of 37%; realized net profit of 130 million yuan, an increase of 159% over the previous year; and realized deducted non-net profit of 127 million yuan, an increase of 202% over the previous year. In 2018, the company expects to achieve net profit of 1.9 to 215 million yuan, an increase of 170%-190% over the previous year. Extend the digital art education industry chain and raise the growth ceiling (1) Mars Era, the leading agency for art IT training, developed steadily and added campus capacity in Beijing in the second half of 2018. According to performance promises, a net profit of not less than 105 million yuan should be achieved in 2018. (2) In June of this year, Mars Era acquired 80% of the shares in Kaimo Vision, a post-film and television special effects production company. Kaimo Vision can provide internships and employment channels for Mars Era trainers, and promised net profit of not less than 36 million yuan in 2018, cumulative net profit of not less than 85 million yuan in 2018-2019, and no less than 150 million yuan in cumulative net profit for 2018-2020. (3) In October of this year, the company announced that it plans to establish a digital art college in cooperation with Guangxi College of Information Technology. The digital art college's enrollment target is 3,000 people, and the company accounts for 55% of the shares. The proposed majors include digital media art design, interior art design, game design, film and television multimedia technology, etc., which can have a good synergy effect with the training business of the Martian era. Profit forecasting and investment ratings. Considering the weakening macroeconomy and increasing employment pressure, Mars Era has performed steadily as a leading institution for art IT vocational education. The company expands the upstream and downstream of the digital art education industry chain through mergers and acquisitions and cooperation, effectively enhancing the competitive advantage of the Martian era and continuously increasing the company's growth ceiling. The company's traditional business grew year-on-year due to changes in exchange rates and increased market demand. We estimate that the company's net profit for 2018/2019/2020 will be 2008/2.57/316 million yuan (the original forecast value was 1.88/2.37/265 million yuan), the corresponding EPS would be 0.50/0.65/0.80 yuan, and the corresponding PE would be 15/12/10 times, maintaining the “recommended rating”. Risk warning: Offline branch expansion is falling short of expectations; performance promises were not fulfilled during the Martian era; changes in the fishery industry; macroeconomic risks.