Matters: The company released its third quarter results report, stating that net profit attributable to owners of the parent company for the first three quarters was 116 million yuan, up 286.72% from the same period last year; operating income was 1,038 million yuan, up 139.07% from the same period last year; and basic earnings per share was 0.45 yuan, up 164.71% from the same period last year. Investment Essentials 1. The performance is in line with expectations, and the performance of mergers and acquisitions is expected to continue to exceed the gamble. The company had previously made a three-quarter performance forecast (forecast of 112 million to 120 million yuan at the time) and disclosed actual results of 115 million yuan, in line with previous expectations. The company's Q3 was 58.12 million in a single quarter, mutual advertising brought in a quarter's performance of 32 million, and the combined profit of the company's Guodu, Kuanyi, and parent company was 26.12 million. The company's management expenses increased dramatically in the Q3 quarter. The parent company's mergers and acquisitions incurred expenses of 10 million yuan, and the value-added and amortization of assets subject to mergers and acquisitions was 8 million yuan. We expect Guodu Internet's performance in the first three quarters to be over 70 million, and it is quite clear that the performance over the whole year will surpass gambling. 2. The target of “water sellers” of the mobile Internet is that Guodu Internet's performance continues to grow rapidly. Guodu Internet's main business is to provide mobile information system solutions and operation services to industry groups and large enterprise customers, mainly to help enterprises send SMS services. The SMS business is an industry that is generally not favored by everyone, so the value of the market has always been underestimated. While the 2014 fiscal year performance significantly exceeded market expectations, the first half of 2015 continued to grow at a rapid pace. The revenue scale in the first half of the year reached 354 million yuan, and the gross profit margin was 25.06%. The gross margin level was higher than last year. The trend of high revenue growth was clear, and net profit of 45 million was achieved in the first half of the year. The logic for the growth of enterprise SMS is simple; enterprise SMS is gradually evolving into a type of traffic business. (1) With the rapid development of the mobile Internet, the mobile phone number has become a very important identification ID. Messages such as verification codes and mobile Internet confirmations such as group purchases will inevitably be sent in the form of SMS. If we were to open the text messages on our mobile phones now, it is expected that most of the text messages will be occupied by notifications from various Internet companies. To take a simple example, every time you use Didi Taxi, it will probably provide you with an SMS; (2) The growth rate of this industry last year has already been shown. Many A-share listed companies have acquired this type of company, with an average growth rate of over 60%. Looking at the high growth rate of many companies in the first half of this year, the high growth trend of many companies is still remarkable. (3) In the future, there will be more market space from enterprise SMS to traffic operations. It is expected that next year the traffic market will catch up with the enterprise SMS market, driving the industry to double its growth. 3. Mutual advertising: leading companies in digital marketing, scarce targets driven by technology. The mutual advertising acquired by the company is in a rapidly exploding industry, and the industry space is huge: the size of the Internet advertising market exceeds 150 billion dollars, and it is still growing at a rate of 20%-30% every year. Currently, the market size based on RTB (implementation of the pricing transaction model) now has a penetration rate of only 8.9%. Standing on the SSP side of RTB, it is a typical technology-driven company. It has an obvious first-mover advantage in the industry and a continuous positive cycle. Better technology enables it to obtain better prices, attract more media, bring in more data, and further improve technology. The moat is remarkable. Mutual advertising business model: Second- and third-tier media that focus on long-tail traffic, buy out advertising slots. Mutual mass advertising blocks the purchase of advertising slots on websites, and carries out technical optimization of media procurement traffic to achieve traffic value increase, mainly by obtaining profits by earning sales price differences. The company is currently doing these second- and third-tier media, and the selling price is 40%-60% higher than that of these media doing it themselves, so it can sell at a better price. The company's goal for 3-5 years is to help maximize the benefits of these second- and third-tier media. In 2015, the company's PV volume and number of users will grow rapidly, especially on the mobile side. The company is actively deploying, and it is expected that mobile revenue will soon exceed that of PC revenue. The company terminated additional distribution projects and focused on Internet+. The company's three mergers and acquisitions in three years have steadily advanced the development strategy of Wutong Holdings. We believe that the company has gradually figured out the direction in the future on the path of external expansion, focusing on Internet+ to better build Wutong Holding Group. Based on optimism that the company's industry and capital will continue to gain strength and enjoy the performance explosion brought about by the dividends of Internet development, we predict that the company's 2015 and 2016 EPS will be 0.57 and 1.33, respectively, and the corresponding PE will be 67 and 28 times. Risk warning for maintaining recommended ratings: 1. The acquisition of mutual advertising has not yet been completed, and there is uncertainty 2. Gambling performance falls short of expectations