Event: The company released its 2016 three-quarter report. Comment: The company's performance continues to grow. 1) The company achieved revenue of 919 million yuan in the third quarter of 2016, up 43% year on year; realized net profit of 32.11 million yuan, up 38% year on year; total revenue from January to September was 2.253 billion yuan, up 19.6% year on year; net profit to mother was 113 million yuan, up 28.6% year on year. 2) The company's annual blockbuster “Notes on the Tomb Raider” movie released in Q3 grossed 1 billion dollars, which was the main driving factor for the increase in Q3 performance. Sales expenses, administrative expenses, and asset impairment losses have risen. 1) In January-September, the sales expense ratio increased from 3.08% to 3.30%, and the management expense ratio increased from 4.98% to 6.00%, mainly because Tianyi Film and Television and Lugang Internet Film and Television were included in the scope of the consolidated statement in the current period, while the movie and TV drama industry generally had higher expense ratios; 2) Asset impairment losses increased from 17.47 million yuan to 35.48 million yuan, an increase of 103% year on year. The sharp increase was mainly due to the increase in accounts receivable from 419 million yuan to 579 million yuan, an increase of 37.98% year on year. Profit forecast and rating: We expect the company's EPS for 2016/17/18 to be 0.2/0.24/0.29 yuan, corresponding to the current PE stock price 50/41/34 times, respectively. 2016 is the first year of the company's Internet film and television business. In the future, the company will launch a number of online dramas and TV series such as “Touching Gold”, “Journey to Mexico”, and “Road to White Tonight”. With the integration of the company's upstream and downstream resources in the film and television industry and the advancement of the Internet film and television strategy, the company will usher in a period of rapid development and maintain a “gain” rating. Risk warning: The regulatory policies for online dramas are getting stricter; the performance of movies and TV dramas falls short of expectations.