Key investment points The company's traditional business is rising steadily. 1) The company's main business is publishing, printing, material trade business and primary and secondary school textbook agency publishing. The company achieved total revenue of 7.885 billion yuan in 2016, an increase of 10.46% over the previous year, and net profit to mother of 715 million yuan in 2016, an increase of 1.71% over the previous year. 2) The digital distribution business developed rapidly. In the first half of 2016, the company's digital publishing business revenue reached 11.015,900 yuan, an increase of 56 times over the previous year; its e-commerce platform Yunshu.com increased profits. Revenue from non-book products in the first half of 2016 was 67.5984 million yuan, an increase of 2.14 times over the same period. Endogenous+outreach, deepening new business development. 1) In terms of digital publishing, the construction of “China Reading Network” digital resources is progressing steadily, and more than 7,000 types of e-books have been stored; in terms of education cloud platforms, the company's education cloud platform has been officially built, and 12 products of China Education Publishing Network have entered the e-education textbook procurement catalogue; 2) Yunshu.com's e-commerce and logistics express delivery business are developing well. “Yunshu Network” has launched more than 3 million products. Currently, Xinhua Bookstore in Henan Province has received qualifications, authorization and special funds to integrate e-commerce, logistics and express delivery services in the county; 3) In recent years, it has been repeatedly tried to expand and expand overseas acquisition and expansion In business, he has worked successively with Flute Girl, Changda, etc. Contact with a large number of high-quality targets in film, television, marketing, and games continues to expand steadily in new businesses, and future extended mergers and acquisitions are worth looking forward to. Profit forecast: The company's EPS for 16/17/18 is expected to be 0.70/0.75/0.77 yuan, respectively, and the current stock price corresponding to PE is 18/17/17 times, respectively. We believe that the company is deeply involved in traditional business and is expected to continue to release its performance steadily. We are optimistic about its layout in the digital publishing and e-commerce industries. At the same time, outreach expansion is worth looking forward to, and the first coverage gives it an “increase in wealth” rating. Risk warning: 1) New business expansion falls short of expectations; 2) Industry competition intensifies.