Incidents: (1) On May 25, 2017, the company issued an announcement to transfer 30% of Thumb Play's shares to Tianrun Digital Entertainment, with a transaction consideration of $227 million, of which $136 million in shares and $91 million in cash consideration; (2) On June 9, the company issued a plan for the non-public offering of A shares to raise 1.2 billion yuan, not more than 172 million shares, to invest in the production of TV dramas and web series; (3) On June 12, the company issued an announcement that the controlling shareholder Guo Xiangbin advocated for employees to increase their share holdings in the company, and The promised holding period reaches 12 months, and the profit is not less than 10%, and the lower part is compensated. Key investment points: Selling Thumb Play and adjusting the business layout: In order to further adjust and optimize the company's business layout, sell related businesses, obtain investment income, and at the same time respect the development wishes of the Thumb Play management team, the company plans to sell 30% of Thumb Play's shares at a transaction value of 227 million yuan. In this transaction, Huawei Culture will receive 91 million yuan in cash and 104.46 million shares (13.05 yuan/share) of Tianrun Digital Entertainment shares totaling 136 million yuan. Non-public issuance of A shares to increase investment in TV series and web series: The company plans to increase 1.2 billion yuan, all of which will be used for the production of movies and TV series projects for the company's subsidiary Dream Star Garden, including 4 TV series and 5 web dramas, with a total project investment of 2,038 billion yuan, of which the company invested 1,881 billion yuan. Through the implementation of this project, the company can increase the production and market share of the company's premium film and television productions, enhance the company's continuous profitability, meet the growing demand of first-tier TV TV for premium TV series procurement, further consolidate the company's competitive position in premium TV series, and also promote the development of the company's related business. It is an important measure to implement the company's Internet culture development strategy. At the same time, project implementation will help enhance the core competitiveness of the company's premium film and television productions. The controlling shareholder advocated an increase in employee holdings, demonstrating the company's confidence: Controlling shareholder Guo Xiangbin advocated that employees increase their holdings of the company's shares, and promised that if the employee's net profit from buying Huawei Culture shares during the holding period (up to 12 months) was less than 10%, it would be compensated by himself. The controlling shareholder proposed an increase in employee holdings and promised a 10% guaranteed profit, further demonstrating the company's management's confidence in the company's performance and stock price. Profit forecast and valuation We expect the company's total operating income in 2017-2019 to be 1,084 million yuan, 1,464 million yuan and 1,843 million yuan respectively. The net profit attributable to the parent company was 404 million yuan, 546 million yuan and 688 million yuan respectively, corresponding to EPS of 0.43 yuan, 0.53 yuan and 0.67 yuan respectively, and the corresponding PE was 23x/19x/15x respectively, giving a “buy” rating... Risk suggests macroeconomic fluctuations; the progress of the drama falls short of expectations; the performance of mergers and acquisitions falls short of expectations