Event: The company released its 2016 semi-annual report. In the first half of 2016, it achieved operating income of 583 million yuan, an increase of 89.32% over the previous year, and net profit attributable to shareholders of listed companies of 63.3438 million yuan, an increase of 205.5% over the previous year. The LED business has solidified its foundation, and digital marketing has contributed new profit points. 1) The company's LED light source devices achieved main business revenue of 202 million yuan, an increase of 8.95% over the previous year; LED lighting achieved main revenue of 220 million yuan, an increase of 90.35% over the previous year. Nikkami Optoelectronics contributed the most to LED lighting, achieving revenue of 197 million yuan and net profit of 177.03 million yuan. 2) The Internet business has gradually become an important source of profit for the company. The company actively carried out digital marketing business and completed the acquisition of Dingsheng Yixuan and Yiwan Wireless. Since the merger on March 31, Dingsheng Yixuan has achieved revenue of 65.2876 million yuan and net profit of 10.4943 million yuan; Yiman Wireless has achieved revenue of 65.9274 million yuan and net profit of 15.6524 million yuan. Continue to build the layout of the entire digital marketing industry chain. Dingsheng Yixuan, acquired by the company, mainly provides Internet search engine advertising services for the home decoration industry; Yibang Wireless provides one-stop mobile Internet marketing services; and Botu Advertising, a shareholding company, is a well-known Internet marketing full-service provider in the industry. In addition, the company suspended its trading and plans to acquire Beijing Vientiane Xindong Mobile Technology. The target target is an enterprise that provides customized mobile marketing services, mainly for accurate advertising for customers. Customers include industry leaders such as P&G, Volvo, and Erie. The company's acquisition and equity participation in the above four target companies aims to complete the layout of key points in the digital marketing ecosystem. In the future, it will gradually become a digital marketing enterprise in the entire industry chain integrating creative planning, technology platforms (DSP/DMP), data mining, wireless distribution, media resources, and customized services for advertisers. The competitiveness of high-end LED lighting is highlighted. The subsidiary Nisshang Radio and Television enjoys high popularity in the LED high-end professional lighting market. It is mainly engaged in the R&D, production, sales and service of LED advertising and signage lighting and LED light strip lighting products, and has cooperative relationships with Agricultural Bank, China Mobile, CCTV, Hisense, Anta, and McDonald's. During the reporting period, Rishang Optoelectronics achieved revenue of 197 million yuan, contributing 89.55% of LED lighting revenue. After the acquisition, the company and Nikkami Optoelectronics formed good collaboration and complementarity, which will greatly enhance the market share and brand influence of the company's products and increase the overall competitiveness of the LED business. Profit forecasts and investment advice. According to the company's semi-annual report on various business conditions, we have slightly adjusted the company's profit forecast. It is estimated that the company's 2016-2018 EPS will be 0.18 yuan, 0.22 yuan, and 0.24 yuan respectively, and net profit will maintain a compound growth rate of about 50% for the next three years. Maintain the “Overweight” rating. Risk warning: the risk that the performance of the M&A company will not meet or fall short of promises; the risk of diversified business integration or failure to meet expectations; the risk of the original main business or insufficient growth rate.