China Television Media's revenue in 2011 was 1.29 billion yuan, up 10.0% year on year. Net profit belonging to the parent company was 73 million yuan, down 8.2% year on year. EPS was 0.22 yuan, lower than our previous forecast of 0.24 yuan. Net profit after deducting non-recurring profit and loss was 72 million yuan, down 9.2% year on year. The profit distribution plan was to distribute cash of 0.86 yuan (tax included) for every 10 shares, with a distribution ratio of 38.9%. The decline in gross margin was the main reason for the decline in performance. It was 13.9% in 2011, down 1.7%, as shown by: (1) the gross margin of the advertising business continued to decline, from 5.8% in 2010 to 3.8%; (2) due to the boom in movies and TV dramas last year, production costs increased dramatically, and gross margin fell to 16.8% from 18.1% in 2010. The travel business contributed 39.8% of profits in 2011, and the gross margin was as high as 49.5%. As the company fully exploits traditional resources, there is still room for improvement in operating income and gross margin. In 2011, film and television revenue was 487 million yuan, contributing 45.8% of profit, making it a profitable pillar business. The company is expected to use the CCTV platform to make a big difference in the film and television industry in the future, and the gross margin is also expected to rise to 60% of the industry average. Judging from the company's disclosure of the 2012 related transaction budget, the amount of advertising agencies declined for the first time, revealing a positive signal that the gross margin of advertising costs is expected to reverse the downward trend and increase profits. CCTV adjusted its TV drama procurement strategy in 2011, focusing on the procurement of “homemade dramas.” As one of the two companies that produce TV dramas under CCTV, the company has the advantage of “resting on big trees to take the cool” advantage, and is expected to receive procurement support from CCTV. We lowered the company's profit forecast for 2012-13. EPS fell from 0.31/0.33 yuan to 0.25/0.27 yuan respectively, with declines of 19.4% and 18.2% respectively. EPS is expected to be 0.29 yuan in 2014, corresponding to the current PE stock price of 60/54/50 times, respectively, maintaining a “neutral” rating.