Key investment events: The company released its 2016 annual report and achieved full-year revenue of 4,080 billion yuan, a year-on-year decrease of 24.94%; net profit was 245 million yuan, an increase of 11.15% over the previous year. In the first quarter of 2017, the company achieved revenue of 573 million yuan, a year-on-year decrease of 15.65%, and net profit of 9.129 million yuan, an increase of 162.91% over the previous year. Higher gross profit and lower expenses helped turn a loss into a profit. In 2016, the company's net profit after deduction was 603.682 million yuan, compared to turning a loss into a profit in 2015. The improved performance was mainly due to (1) the restructuring of the main business, which increased the overall gross margin from 14.51% to 20.41%; (2) due to factors such as disposal of subsidiaries and business adjustments, sales expenses and management expenses were reduced by 13.64% and 21.09%, respectively. At the same time, the reduction in loan amounts reduced financial expenses by 65.96% year on year. The improvement in performance in the first quarter was mainly due to income from disposal of non-current assets. In the first quarter of 2017, the company's net profit was 9.129 million yuan. Compared with -14.51 million yuan in the same period in 2015, the company's performance improved markedly. The main reason why the company turned a loss into a profit during the reporting period was the disposal of Rand Technology's shares and the sale of some Zhonghe Technology shares, resulting in non-current asset disposal income of RMB 22.2374 million. After deduction, the company's net profit was -9.735 million yuan, an improvement from -15.9103 million yuan in 2015. Join forces to explore new models of social and health insurance payment services. The company recently signed a “Framework Cooperation Agreement” with Ant Financial and will cooperate in the fields of “Internet+Human Society” and “Internet+Healthcare”. Through this cooperation, it will promote the transformation of the company's social services from the government side to the consumer side, and at the same time help promote the company's medical insurance mobile payment business throughout the country, and explore new business development models. Profit forecast and investment advice: Without considering the impact of Huatong Cloud data and tables for the time being, we gave the company the 2017-2019 EPS of 0.32, 0.38, and 0.44 yuan respectively, maintaining the “increase in holdings” rating. Risk warning: Market competition risk; M&A benefits fall short of expectations.