Matters: On November 14, the television and radio media issued an announcement to acquire assets by issuing shares and paying cash, and at the same time, to raise no more than 2.138 billion yuan in supporting capital by issuing shares to no more than 10 other specified investors. In response to this, our comments are as follows: A fixed increase in supplementary funding to expand the new media landscape of the mobile Internet. The announcement stated that the company plans to acquire 79.25% of Chengdu Guyi's shares with payment consideration of 630 million yuan. Of these, 69.25% of the shares will be paid in consideration of issued shares and 10% of the shares will be paid in cash; the purchase of 80% of Beijing's shares, with payment consideration of 520 million yuan for payment of 520 million yuan, including a total payment of 1.04 billion yuan in cash; and the acquisition of 30% of Shanghai Jiuzhizhi's profit For equity, the total payment consideration was 468 million yuan. Of these, 27% of the shares were paid in consideration by issuing shares, and 3% of the shares were paid in cash as consideration. At the same time, the company also plans to discover shares from no more than 10 other specific investors to raise supporting capital of no more than 2.138 billion yuan. Among them, 70 million yuan was used to pay intermediary fees; 79.5 million yuan was used to pay for the acquisition of Chengdu Guqiang; 520 million yuan was used to increase capital in Beijing, and 520 million yuan was used to pay the purchase price of 100% of Anwo Hong Kong's shares; 660 million yuan was used to replace payments payable by listed companies for the acquisition and capital increase of 70% of Shanghai Jiuzhirun's shares before raising supporting capital; 46.8 million yuan was used to pay cash consideration for Shanghai Jiurun's transactions; the remaining balance of no more than 761 million yuan was used to supplement liquid capital. The transaction will not have a significant impact on the equity structure of listed companies. Before this transaction, the Hunan Radio and Television Industry Center held 235,053,523 shares of listed companies, accounting for 16.58% of the total shares; after the restructuring was completed, the Hunan Radio and Television Industry Center held 15.16% of the shares, and is still the actual controller of the company. According to the announcement, the three companies promised a total net profit of 213 million yuan, 294 million yuan, and 366 million yuan in 2015-17. The corresponding increase in EPS preparation was 0.14 yuan, 0.19 yuan, and 0.24 yuan, respectively. We believe that the company's fixed acquisition is a reflection of the company's firm commitment to promoting the transformation strategy of traditional cable networks to new media, continuing to expand the mobile Internet new media layout, and build an integrated integrated media platform company from “content+channel+platform”; raising capital will help supplement capital for the company's business expansion and lay the foundation for healthy growth in the medium to long term. It is predicted that the company will continue to strengthen in the field of new media in the future. Entering the reading and gaming content industry and integrating high-quality mobile Internet advertising platforms, the three acquisition companies involved this time are Chengdu Guyi, Shanghai Jiuzhirun, and Beijing Zhangkuo, which are well-known digital reading, game, and mobile internet advertising companies in China. Among them, Chengdu Guqiang, founded in 2004, is an online literature platform integrating digital reading, original literature mining, author training, and IP operation, forming an all-media publishing model of “one content, multiple media, simultaneous publishing”. It has the “Reading Book Network”, one of the top ten original literature websites in China. In 2013, 2014, and January-June 2015, the company achieved operating income of 110 million yuan, 127 million yuan, and 67.1603 million yuan respectively, of which net profit was 33.92446 million yuan, 40.25 million yuan, and 18.714,700 million yuan, respectively. Established in 2003, Shanghai Jiuzhirun is a well-known game company in China. Classic online audio and dance games such as “Jin Band” and “Strong Dance Company” have been introduced successively, setting an industry record for the first domestic audio and dance game with 1 million players online at the same time. Since 2012, the company has actively adapted to the trend of mobile Internet game development and has begun mobile game development and distribution of high-quality IP buyouts, agents, and independent IP products. At the end of 2013, Jiuyou.com and Momo Platform first released the mobile game “Momo Jin Dance Company”, which achieved impressive results at number 2 in the app rankings in the same period. In 2013, 2014, and January-June 2015, the company achieved operating income of 399 million yuan, 363 million yuan, and 196 million yuan respectively, of which net profit was 112,000 yuan, 894.13,300 million yuan, and 407.388 million yuan, respectively. Beijing Zhangkuo was founded in 2010 and has Anwo Media, the leading mobile precision marketing platform in China. Its Internet advertising platform connects with high-quality domestic media resources such as NetEase, Sohu, Tencent, Sina, Today's Headline, First Finance, and Today's News. At the same time, it has developed brand customers represented by Mercedes-Benz, BMW, L'Oreal, Estée Lauder, Mengniu, Red Bull, Huawei, and OPPO, as well as industry customers represented by Perfect, Shengda, JD, Meituan, and Gaode Map. In 2013, 2014, and January-June 2015, the company achieved operating income of 76.3975 million yuan, 217 million yuan, and 165 million yuan respectively. We believe that this acquisition has added to the company's resource reserves for high-quality literature and game content industries, further enriches the upstream content industry, and is expected to form collaboration between literature, games, film and television. Furthermore, the company continues to expand its mobile marketing layout, so that the mobile platform strategy forms a closed loop, spans TV, PC, and mobile devices, and finds new driving engines for future development and performance growth. In September 2015, the company, together with Alibaba and Imprint Media, held a press conference in Hunan and announced the launch of a smart set-top box equipped with 4K HD, voice remote control, watch-and-buy, and home WIFI functions — the “Home Box”, which has now reached 40,000 households. We believe that the company's recent series of cooperation and extension mergers and acquisitions reflect the company's firm belief in transformation. On the one hand, it has actively promoted the active transformation of its own cable network and created a free home entertainment ecosystem. At present, the smart set-top box in cooperation with Ali has begun to be piloted, and the response has been good. On the other hand, we are actively expanding and improving our layout in the field of the Internet, especially mobile Internet, and new media, laying a solid foundation for future company development. Television, Radio and Media: Building a vertically integrated layout and transforming the Internet New Media Group Corporation has always been a representative company in the cable network field. In recent years, under the big wave of the Internet and mobile Internet, the company has actively promoted the transformation strategy. Since August 2014, the company has begun implementing a strategy to transform from traditional cable service providers to emerging Internet media, and has carried out a series of extended acquisitions to supplement the company's new media layout. The company has successively acquired Guangzhou Yifeng and Ekoski, the mobile Internet media and application distribution platform Jiujianxia, Jiangsu Wutai, which focuses on smart tourism, and Jiuyou.com, an established domestic game producer and publisher, continuously accelerating the pace of transformation and complementing its new media layout. Through a series of external mergers and acquisitions, the initial layout of the new Internet media “channel+platform+content” has been completed. We expect that in the future, on the one hand, the company will continue to implement the vertical integration strategy of “channel+platform+content” to expand the business sector; on the other hand, it will deeply integrate its own business and emerging businesses to maximize collaboration between different businesses, create its own complete ecosystem, and truly transform into an Internet new media group. Risk factors: macroeconomic system risk; new business development; M&A process risk and management risk of M&A integrated business. Profit forecast, valuation and rating: The three companies acquired this time promise a total net profit of 213 million, 294 million, and 366 million yuan in 2015, 2016, and 2017. Considering the impact of the company's current business layout and extended expansion, we expect the company's 2015-2017 EPS preparation to be 0.50/0.70/0.99 yuan; the current price is 31.25 yuan, corresponding to 2015-2017 PE 63/45/32. Maintain a “buy” rating, considering the company's position as a regional leader and leader in cable reform, and building a new Internet media group with vertical ecological transformation.