Key investment events: The company released its three-quarter report. The first three quarters achieved revenue of 1,578 billion yuan (+21.13%), net profit of 97 million yuan (-19.75%), net profit of 0.85 million yuan (+20.21%) after deduction of net profit of 0.85 million yuan (+20.21%), and basic earnings per share of 0.3369 yuan/share. Comment: The performance was in line with expectations, and net profit after deduction increased by 20%. In 17Q3, the company sold 11.68 million shares of Jiaotong University's Onli shares, generating investment income of about RMB 50.4 million, increasing performance. After deducting the impact of non-recurring profit and loss, net profit after deducting non-recurring net profit increased by 20% in the first three quarters of '18, in line with the revenue growth rate and in line with expectations. There was a slight increase in gross margin, and a slight decrease in the cost ratio for the period. The gross profit margin was 45.32% (+1.11pct), and the net profit margin was 5.71% (-2.92pct, mainly due to investment income of about 50 million yuan in the same period last year). The total cost rate for the period was 38.62% (-1.3 pct), of which the sales expense ratio was 25.11% (+2.59pct), mainly due to the expansion of the scale of the K12 education and training business, the management expense rate of 13.69% (-3.64pct), and the financial expenses rate -0.18% (-0.23pct), mainly due to increased interest income. There is a possibility of equity optimization. Up to now, the largest shareholder, the Jiaotong University Industrial Group, and the People's Jiaotong University Enterprise Management Center, which has acted in concert with it, hold a total of 22.65% of the shares. The China Finance Department's plan to increase its holdings announced in April has been completed. The total shareholding of 21.18% of the shares, and the Changjia Group holds a total of 17.19% of the shares. The ratio between private capital and controlling shareholders is close. On May 11, the second meeting of the Central Committee on Comprehensive and Deepening Reform pointed out that changes in the enterprise system belonging to colleges and universities should adhere to the direction of reform of the state-owned assets management system and carry out comprehensive clean-up and regulation of enterprises belonging to colleges and universities. Although the actual controllers have not changed at present, combined with the current shareholding situation of private capital, we believe that there is a possibility of further optimization of equity in the future, which is expected to improve management efficiency. The name was changed to “Onli Education” to be closer to the main business. The company's stock abbreviation will be changed from “New Nanyang” to “Onli Education” from November 2, highlighting the main business of education and training and the company's development direction, and enhancing recognition. Investment advice: Starting last year, Onli Education's expansion has accelerated. Revenue and profit increased by 20% + in the first three quarters of this year, confirming that the previous expansion has gradually entered a harvest period. Regardless of the investment income brought by the reduction in holdings of Jiaotong University's Onli, the estimated earnings per share for 2018/19/20 are 0.41/0.53/0.63 yuan, corresponding to a valuation of 47x/37x/31x, with a current market value of 5.5 billion yuan. Considering the positive effects of possible changes in equity on the company's future management efficiency and performance, the “buy” rating is maintained. Risk warning: The expansion of training outlets and enrollment falls short of expectations; the impact of relevant policies of training institutions on the progress of expansion; the expansion of vocational education, international education, and early childhood education business falls short of expectations.