Earnings expected to increase 190~220% YoY

Preannounced net profit attributable to shareholders in 1~3Q isRmb68.85~75.95mn, up 190~220% YoY. CICC expects 1~3Qearnings of around Rmb72mn (in line with expectations).

Financial statement consolidation led to high growth. Variousbusinesses maintained good momentum.

Trends to watch

Acquisition in telecom and broadcasting/TV big data;national big data strategy brings benefit.

Combination of mass video + mass bandwidth the strategyfor telecommunication and broadcasting/TV operators,positive to Starcor.

Valuation and recommendation

Maintain earnings forecast unchanged, with 2016/17e netprofit of Rmb119mn/146mn (+66.6%/22.1%). Maintain TP atRmb36.17, implying 57x 2017e P/E. Maintain BUY.

Risks

Slow progress in telecommunication big data, monetization ofbig data disappoints; fierce competition in deep packetinspection market, leading to lower gross margin.