1. Overview of the incident Recently, we conducted on-site research on the company and exchanged views with company leaders on the company's long-term development strategy, the development of the three major businesses of movies and TV dramas, advertising, and tourism. We believe that the company's business transformation has begun to bear fruit since this year, and the movie and TV drama business is expected to become one of the main sources of profit growth in 2012. 2. Analysis and judgment that the company's transformation has begun to bear fruit. The film and TV drama business broke through and established an upward inflection point in performance. The sales prospects are relatively optimistic, and five famous directors have signed the “Departure Plan”. Next year, the TV series is expected to release 1 to 2 more boutiques. Next year, the company faces the risk of reducing advertising agency resources, and will adopt diversified measures to meet the challenges of increasing ticket prices for the Wuxi Film and Television Base by 25% to 30%, and the travel business is expected to achieve relatively rapid growth' 3. Profit forecast and investment suggestions The company's EPS is expected to be 0.28 yuan, 0.40 yuan, respectively 0.52 yuan, corresponding to current PE stock prices of 54X, 37X, and 29X. For the first time, it was given a “careful recommendation” rating. Considering the average valuation of the film and television sector, and that the company is in a transformation and breakthrough period, and as the only listed company under CCTV, there are strong asset injection expectations. It can give 45 times PE, which corresponds to the 2012 profit level, and the target price is as high as 18 yuan. 4. Risk warning: 1. Macroeconomic decline; 2. Increased level of industry competition; 3. Sector valuation correction.