Traditional business stabilization+expansion of the film and television industry ensures steady growth in performance. Previously, the company's main business was to sell textile products, then entered the film and TV series industry through mergers and acquisitions of 100% of Century Changlong's shares and 51% of Tianyi Film and Television. In 2016, it also established a wholly-owned subsidiary, Lukang Internet to boost the Internet movie and TV drama content production industry. In the future, the company will take advantage of the brand advantages and rich IP resources of Century Changlong and Tianyi Film and Television to ensure a significant increase in film and television revenue this year and next. Moreover, after the merger of film and television companies acquired by the company, asset-light film and television companies will also increase the company's gross profit margin, and at the same time increase the company's net profit growth rate. Entering the film and television industry through mergers and acquisitions, future revenue sharing between leading dramas and imported films is expected to increase profits. Lukang Culture will enter the TV series and film industry by acquiring 100% of Century Changlong's shares and 51% of Tianyi Film and Television's shares. Century Changlong and Tianyi Film and Television performed well in 2016. “Tomb Raider” grossed over 1 billion yuan and ranked the 8th highest grossing movie of the year. At the same time, it is actively planning to launch imported films such as “Transformers 5,” “Extreme Agent,” “Avatar 2,” and “The Expendables 4.” In TV dramas, works such as “Dragon Ball Legends”, “Flowers Bloom Like a Dream”, “Don't Disturb Me”, “Touching Gold”, “Blue Blood and Yellow Sand”, and “Cao Cao” will be introduced. The company's future strategic direction is in line with market trends, and it is expected to increase film and television revenue next year. The establishment of a subsidiary to seize opportunities for online dramas, and the high-quality development of the company's talent reserves is in line with industry trends. The company established a wholly-owned subsidiary, Lukang Internet, to lay out the Internet movie and TV drama content production field, thus establishing a brand advantage. The company's fixed increase of 1 billion yuan in 2015 will also be used mainly for Internet movie and TV drama projects. Under the premise of strictly controlling the risks of Internet movie and TV series projects and safeguarding return on investment, it will further enhance the company's continued profitability in the film and television business. At the same time, an equity incentive plan was also awarded to the Internet film and television team. According to performance promises, combined with the company's 2016 layout plan for the film and television industry sector and high-quality talent reserves, it is highly likely that the company will be able to further ensure the completion of performance in the future. Profit forecasts and investment recommendations were covered for the first time, and a “careful recommendation” rating was given. We expect EPS to be 0.23 yuan, 0.28, and 0.32 yuan in 2016-2018, and the corresponding PE is 39X, 33X, and 29X. Given the company's active market space for movies and web dramas, as well as the company's outstanding performance in the industry, it is estimated that the company's valuation range for the next 6 months will be 11-12 yuan compared to the valuation level of companies in the same industry. Risk warning 1). Box office revenue falls short of expectations; 2); Internet drama regulations are becoming stricter; 3), the risk of declining textile exports and sluggish clothing consumption.