Key investment points: The “4+2” layout of up-and-coming publishing companies in the North promotes “secondary entrepreneurship” of the company. North China United Publishing and Media Company was founded on August 29, 2006, and became the first publishing company in China to achieve the overall listing of its editorial business and business operations on December 21, 2007. Currently, the company's main business includes publishing business, publication distribution business, bill printing business, and printing material supply business. The company actively promotes the “4+2” industrial layout, comprehensively promotes the integration of resources and “secondary entrepreneurship”, and strives to build a modern and international large-scale cultural enterprise group. The upgrading and transformation of traditional businesses, digital publishing and Internet distribution, continues to gain strength. In recent years, with the gradual decline of the print media industry, the company is also actively seeking strategic transformation on the basis of consolidating its traditional main business. In terms of publishing, on the one hand, the company consolidates physical publishing and strives to create publishing products with outstanding product characteristics and good brand reputation. On the other hand. The company is also actively deploying digital publishing. The company has built and perfected a core platform for digital publishing resource databases. The first batch of hundreds of digital publications has already been put into trial operation at the digital reading bases of the three major operators. In terms of book distribution, the company uses the North Book City as the carrier to build a 24-hour bookstore in the North Book City and a high-end specialty bookstore integrating books, coffee culture, and cultural and creative products to complete the upgrading of traditional bookstores. In addition to this, the company is also actively deploying distribution channels on the Internet to create a new “Internet+physical bookstore retail” book distribution system. Build a major education industry system by relying on the advantages of teaching aids and publishing content channels. In the field of education, the company relies on its own teaching aid content resources and textbook distribution channel resources to expand and extend to fields such as early childhood education, K12 education and training, and vocational education. In the field of digital education, the company has signed a strategic cooperation agreement with North China United Radio and Television Network. The two sides have reached strategic cooperation on projects such as online education and digital publishing, and will jointly develop digital education content products, expand digital education marketing and promotion channels, and develop smart terminal products for digital education. The company actively lays out the field of digital education based on the publication and distribution of traditional teaching aids content. The mutual collaboration between the two businesses helps the company build a “content+channel+platform” education industry system. Set up an investment fund to lay out the pan-entertainment industry. The Third Plenary Session of the 18th Central Committee began the third round of state-owned enterprise reform, and the integration of old and new media became an important transformation direction for traditional media. In March 2016, the company jointly invested with Liaoning Bohong Investment Co., Ltd. and Liaoning Publishing Group Co., Ltd. to establish investment funds to lay out the new media industry. The initial design scale of the fund is 501 million yuan, and the company plans to invest no more than 200 million yuan from its own capital. The fund mainly focuses on cultural media, health care and other emerging industries. The capital invested in the cultural media industry will not be less than 60% of the fund's size. The investment direction of the Cultural Industry Venture Capital Fund in new media industries such as film, television, animation, and mobile games will lay the foundation for the company to build an integrated pan-entertainment industry ecological chain. We believe that the company's new media layout through industrial funds is expected to provide strong support for its traditional business in the future and become the highlight of the company's future performance. Profit forecasts and investment advice. The company's future prospects: (1) The transformation and upgrading of the company's traditional business. In the future, the company will concentrate on building digital publishing and Internet distribution on the basis of consolidating its main business. (2) The company's education and new media business layout is beginning to show. In the future, the company will continue to rely on the advantages of teaching aids content and distribution channels to complete the construction of education platforms and improve the development of digital education products; in the field of new media, the company will actively lay out new media and new business formats through investment funds for industrial innovation and investment, and utilize policy trends to achieve integrated development between old and new media. The 2016-2018 EPS is expected to be 0.17 yuan, 0.19 yuan, and 0.21 yuan, respectively. Also, in the same industry, China Media Holdings, Southern Media, and Reader Media's agreed PE expectations for 2016 were 31, 33, and 58 times, respectively. Given the company's small market capitalization and strong expectations for reform and transformation, we gave the company a 62-fold valuation in 2016, corresponding to the target price of 10.54 yuan. Give an increase in holdings rating. Risk warning. There is a systemic risk in the general market, and the company's new media layout may be lower than expected.