The 2011 performance fell short of expectations: the company achieved revenue of 1,289 million yuan in 2011, an increase of 10% over the previous year, and net profit of 73 million yuan, a year-on-year decrease of 8%, equivalent to earnings of 0.22 yuan per share, which was lower than expected. Among them, the fourth quarter achieved quarterly revenue of 479 million yuan, a year-on-year increase of 30.5%, and net profit of 31.23 million yuan, a year-on-year decrease of 27.7%. Profit distribution plan: 0.86 yuan in cash for every 10 shares. Positive: The degree of marketization of advertising, film and television businesses has increased. The company's advertising business achieved revenue of 650 million yuan in 2011, an increase of 12.6% over the previous year in the context of limited coverage. The subsidiary Shanghai China Television International Advertising changed its marketing model, strengthened cooperation with 4A, and developed market-based customer channels, which was the main reason for the increase in advertising revenue. The film and television business began to change its original customized position for CCTV to a market-based position. Interest income has grown substantially. Interest income reached 1.66 million yuan, an increase of 79% over the previous year due to the increase in the average balance of bank deposits in the current period. Negative: Decline in gross margin. The company's gross margin in 2011 was 13.9%, down 1.7 percentage points from the previous year. Among them, the gross margin of the advertising business fell 2 percentage points to 3.81% year on year due to the limited number of alcohol advertisements on the company's agents, and the suspension of commercials for the final version of CCTV's first and eighth series of evening television series; the gross margin of movies and TV dramas fell 1.29 percentage points year-on-year to 16.8%, which is still below the gross profit level of leading companies of more than 30% due to the rapid increase in costs brought about by the boom in the industry. Development trends: 1) The impact of advertising policies of the State Administration of Radio, Film, and Television and CCTV is expected in 2012. At the same time, macroeconomic growth is slowing, and the growth rate of corporate advertising revenue is expected to decline. 2) The production of movies and TV dramas will continue to be increased, and steady growth will still be achieved due to guaranteed quality and broadcasting channels. Valuation and recommendations: The company's 2012-2013 profit forecast was lowered to 0.27 yuan and 0.35 yuan, up 24% and 27% year-on-year respectively. The current stock price corresponding to 2012-2013 PE is 54x and 42x, respectively, and is at the high end of sector valuation. With the advancement of cultural system reform and the inauguration of the company's new management, the company, as the only platform for listed companies under CCTV, is expected to strengthen its positioning and maintain a neutral rating.