Key investment points: The game business is growing at an impressive rate, and revenue and profit are rising steadily. In 2016, the company achieved revenue of about 453 million yuan, a year-on-year increase of 19.61%, and achieved operating profit of about 118 million yuan, an increase of 67.34%; net profit to mother was about 110 million yuan, an increase of 56.97% over the previous year. The increase in performance mainly benefited from the rapid development of the company's game business. In 2016, the company distributed a cash dividend of 0.8 yuan (tax included) to all shareholders for every 10 shares, and also transferred the share capital from the Capital Provident Fund and 5 shares for every 10 shares. The first quarter of 2017 achieved revenue of about 172 million yuan, a year-on-year increase of 115.67%, and realized net profit to mother of about 62 million yuan, an increase of 333.22% over the previous year. Its subsidiary Mochikaka achieved net profit of 65 million yuan in 2016, fulfilling its performance promise. Mochika Card was acquired with 100% cash and consolidated for 17 years. Later results can be expected. The company completed the acquisition of Mochikaka, and Mochikaka achieved net profit of 65 million yuan in 2016. The pure cash acquisition demonstrated the company's confidence in the continued growth of Mochikaka's business and profits. Previously, the company completed the acquisition of Shanghai Junmeng in 2015. After a year of integration and adaptation, the game business is currently growing rapidly. In 2016, the company's game business revenue reached 275 million yuan. Mochikaka was merged in January '17, and the company's annual results can be expected. The content IP layout continues to be deepened to give full play to the synergy of the pan-entertainment and culture industry chain. Currently, the company is still mainly engaged in communication technology services and game business. At the same time, it connects the novel, animation, film and television content of related companies through mergers and acquisitions or shareholding, and focuses on expanding its own culture and entertainment industry chain and building its own IP discovery and incubation system. From 2015 to 2016, the company successively invested in Fuzhou Changdu Information Technology Co., Ltd., Shanghai Yuyang Network Technology Co., Ltd., Shenzhen MSI Technology Co., Ltd., Beijing Zhonglian Baiwen Culture Media Co., Ltd., Guoxin Youyi Data Co., Ltd., and Dongyang Liubai Film and Television Culture Co., Ltd. The business gradually expanded from a dual main business to animation entertainment, literature reading, fan value management, writer brokerage business, film and television production and big data. Participating companies' businesses are intertwined to achieve platform sharing. Investment suggestions: Based on 1) In the context of the gradual rise in customer acquisition costs in the Internet industry, companies that prioritize high-quality IP will gain a card position advantage in increasingly fierce competition. By joining hands with Mochi Kaka and Shanghai Junmeng, the company will gradually enhance the depth and breadth of game IP commercialization capabilities. IP value amplification and the use of underlying big data platforms will become key points for the company to improve its performance; 2) Through continuous mergers and acquisitions and investment in the past two years, the company will continue to advance the Pan-Entertainment landscape. In the future, the company will continue to develop the company by leaps and bounds through various methods such as epitaxial mergers and acquisitions and shareholding. We judge the company's ability to quickly implement the cultural and entertainment industry value chain construction strategic plan and build a leading pan-entertainment brand. We expect the company's 2017-2019 EPS to be 0.79 yuan, 1.04 and 1.35 yuan respectively, giving the company 31 times the 2017 PE valuation, corresponding to the target price of 24.49 yuan. Covered for the first time, an increase in holdings rating is given. Risk warning: New game development and operation failures, brain loss, financial and goodwill impairment risks due to mergers and acquisitions, policy and market risks.