Key investment points: The company achieved high growth in revenue and net profit in 2016. In 2016, revenue was 3,589 billion yuan (+51%), net profit was 179 million yuan (+51%); net profit from non-return was 168 million yuan (+56%). During the reporting period, the company's main textile business achieved revenue of $2.176 billion (+8%), gross profit ratio of 16.45% (up 1.3 percentage points), accounting for 60.63% of total revenue (down 24 percentage points); overall film and television business revenue of 1,217 billion yuan (+440%), gross profit ratio of 19% (down 26 percentage points). The main reasons for this: 1) Some TV dramas took social effects into account during the reporting period, leading to a decline in gross profit; 2) First intervention in film distribution, successfully controlled the distribution of “Tomb Raider Notes”, which led to a decline in gross profit; 2) First intervention in film distribution, leading to a new business launch Structural and gross margin adjustments. Revenue for the first quarter of '17 was 640 million yuan (+37%), net profit of 5.19 million yuan (-9%) after deducting non-return to the mother. In 2017, the company plans to have revenue of 3.8 billion yuan and a net profit of not less than 260 million yuan (if considering the 49% equity acquisition of Tianyi Film and Television, the planned profit is not less than 300 million yuan): 1) Textile business: The plan is to achieve revenue of 2.5 billion yuan (+15%) and profit of 75 million yuan. 2) Movies and TV series: Century Changlong+Tianyi Film and Television (51% equity) plans to achieve revenue of 1.2 billion yuan and profit of not less than 120 million yuan; if Tianyi completes 49% of the equity acquisition, profit is not less than 160 million yuan; based on this business plan, it is estimated that Century Changlong's 17-year net profit is 80 million yuan, and Tianyi Film and Television's overall planned net profit is 80 million yuan. 3) Web drama: Lugang Internet plans revenue of 100 million yuan and profit of 35 million yuan. 4) Equity investment: The plan is to achieve a profit of 30 million yuan through Tangqiao Sewage Treatment Plant, Suzhou Tianrun Animation, and Changchun Agricultural Commercial Bank. During the reporting period, the acquisition of film and television company Century Changlong and Tianyi Film and Television both completed a good performance gamble. It plans to complete 6 TV series, 4-6 movies, and 3 web drama projects in '17. In '16, Century Changlong achieved revenue of 910 million yuan, net profit of 63.3998 million yuan, net profit of 63.302 million yuan after deducting non-return net profit of 63.302 million yuan (although it did not complete gambling of 76.05 million yuan in '16, but deducted total non-return net profit of 179.5559 million yuan in 14-16, completing cumulative gambling); Tianyi Film and Television had revenue of 307 million yuan, net profit of 7906.89 million yuan (net profit deducted 55 million yuan in 2016); and Lugang Internet Television lost 1,423 million yuan. Year 17:1) It is planned to complete 6 TV series, including “The Beautiful Life”, “One Step to Heaven”, “Dragon Ball Legends”, “Tang Ming Huang”, “The Road to White Tonight”, “If Paris Is Unhappy”; 2) It plans to participate in 4-6 film projects, focusing on the investment and distribution of “The Frozen Case”, “Guardians of the Century” distribution, “Chase” distribution, and “The Big Bomb”. 3) The plan is to invest in 4 key web dramas, including “Touch the Gold”, “Aurora Love”, “Rhapsody”, and “The Eighteenth Floor Hotel.” In addition, the announced subsidiary Century Changlong plans to establish a 1 billion film, television and cultural private equity investment partnership (limited partnership) with Straits Bank and Fujian Strait Cultural and Creative Industry Equity Investment Partnership (Limited Partnership), accounting for 25% of the shares, focusing on investment in domestic and foreign film, television, drama, and variety projects. Profit forecast. We are optimistic about deepening the diversified layout of film and television culture on the basis of the steady development of the company's original textile business. The company expects net profit of 268 million yuan and 386 million yuan in 2017 and 2018, corresponding to EPS of 0.30 yuan and 0.43 yuan, respectively. Referring to the industry average, the company was given a 30-fold PE valuation in '17, corresponding to the target price of 9 yuan, and a purchase rating. Risk warning: The planned development of movies, TV shows and web series falls short of expectations, and the overall market is a systemic risk.