Set up an equity investment fund to invest mainly in the culture and entertainment industry: The company plans to establish a subsidiary Zhejiang Dilong Equity Investment Fund Management Co., Ltd. with its own capital of 100 million yuan to promote the company's development into the culture and entertainment industry. Through investment in cultural industry funds, we promote the company's cultivation of cultural industry projects and enrich project sources. Meishengyuan significantly increased its performance and contributed more than 50% to net profit: in the first half of 2016, the company achieved operating income of 604 million yuan, an increase of 47.8% over the same period of the previous year; realized net profit of 108 million yuan, an increase of 159.8% over the same period last year; the reason for the sharp increase in the company's profit margin was that its wholly-owned subsidiary Meishengyuan merged in May 2016. Driven by Meishengyuan, the company's profitability increased dramatically, and gross margin increased by 6PCT to 29.6% year on year; net profit increased 7PCT to 17.9% year on year. The company expects net profit from January to September to reach 225-260 million yuan, with a year-on-year growth range of 230% to 280%. State regulators are taking steps to regulate the mobile stand-alone mobile game market: As the three major operators began speeding up the rectification of the stand-alone game market in 2015, they set a series of payment standards to enhance the user experience. Operators have begun removing products with a high number of complaints, and are focusing on recommending some stand-alone games with high DAU and high-quality games with few complaints. We believe that the benefits to the entire stand-alone market outweigh the disadvantages by strengthening the experience of the game itself after the operator tightens regulations this time. Meishengyuan is in the first tier of domestic stand-alone mobile game distribution, and its performance is expected to exceed expectations: Meishengyuan's operating income and net profit have grown rapidly in recent years. After opening up the market through large-scale investment in the early stages of entrepreneurship, the company's profit scale has grown rapidly since 2015, and gross margin/net profit margin has increased rapidly. Meishengyuan promised to achieve net profit of 180/320/468 million yuan from 2015 to 2017. According to data disclosed in the 2016 semi-annual report, Meishengyuan completed a merger and achieved net profit of 621.8 billion yuan in May-June 2016, and is expected to achieve annual results. For the first time, coverage was given a “buy” rating: considering Meishengyuan's performance promises, we expect the company's 2016/2017/2018 net profit to be 4.3/5.8/660 million, respectively, and diluted EPS of 0.5/0.68/0.78 yuan respectively. The current price corresponds to 30/22/20 times PE in 2016-2018. Dilong Culture was given a 40x valuation, with a target price of 20 yuan. Risk warning: Competition in the industry is intensifying; target promises fall short of expectations.