Key investment matters: The company announced that it will purchase 100% of Kim Ying-ma's shares from specific target investors in Jiuhua and 24 natural persons through a combination of issuing shares and paying cash, while also raising supporting capital from no more than 10 specific investors through a non-public offering of shares. Our comments on this are as follows: Comment: China Television Media plans to acquire 100% of Kim Young-ma's shares. In this transaction, the company plans to acquire 100% of Kim Ying-ma's shares at a price of 1.02 billion yuan. The company needs to issue 689.13,900 shares to counterparties at an issue price of 1,335 yuan; and pay about 100 million yuan in cash. At the same time, the company plans to raise supporting capital for the non-public offering of shares from no more than 10 specific investors through inquiry for quotations. The total amount of capital raised shall not exceed 25% of the total amount of this restructuring transaction, that is, no more than 340 million yuan. The issue price of supporting financing is not less than 1201 yuan/share, and the total number of shares issued does not exceed about 28.3097 million shares. Kim Young-ma achieved a net profit of 53.825 million yuan in 2012 and a net profit of 2,5011,300 yuan from January to June 2013. Based on the TV drama bidding situation this year and our judgment on the growth of the TV drama industry, it is estimated that Kim Young-ma's net profit this year will increase 20% to 65 million yuan, so corresponding to this transaction, the 2013 PE was about 16 times higher. Kim Young-ma is a well-known professional film and television production company in the industry. Kim Young-ma Film and Television was founded in 1993 as a professional film and television production company integrating planning, production, promotion, and distribution. Its main business scope covers movies, TV dramas, and artist agencies. As one of the earliest private institutions in China to engage in film and television production, Kim Ying-ma has a deep understanding and grasp of national supervisory policy guidelines, viewers' ratings needs, broadcast tendencies of broadcast platforms, and the industrial characteristics and operating mechanisms of the entire TV drama industry; she has produced highly influential TV dramas such as “The House Gate” (continued), “Home, N Side” and participated in investing in excellent films such as “Disciples” and “Jasmine Blossoms”. Kim Young-ma enjoys a high reputation in the industry and has the reputation of a “gold medal production company.” Currently, the company's main business module, the television drama business, implements a “producer-centered system” under the leadership of the general manager. Currently, there is a production unit headed by 5 producers (or a production team composed of 1 producer and 1 distributor), which independently completes the entire process of TV series from planning to distribution under the leadership of the general manager. In 2011 and 2012, the company produced 9 TV series /275 and 8 TV series with 272 episodes, respectively. Production was stable, maintaining a production volume of 2 TV series per year for each production unit, with an annual output of about 60 episodes. In the past 2 years, the company has acted as an executive producer or exclusively produced 5 TV dramas, with 148 and 160 episodes respectively. Under the current TV drama business structure, it is expected that the company's output will remain stable; each production unit will implement responsibilities and implement reward and punishment mechanisms by independently assuming profit targets every year. In 2013, Kim Young-ma is expected to bring China Television Media an increase of 60 million in exam preparation profits. After the merger and acquisition of Kim Young-ma by China Television Media, there were 5 listed TV drama production companies in the media industry; Kim Young-ma's current production capacity and profit scale are lower than those of Huace Film and Television, Great Wall Film and Television, Hualu Baina, and New Culture. According to estimates of the profit level of the eight TV series produced by Kim Young-ma in 2012, with a net profit of 53.825 million; under the assumption that production is generally stable and performance is growing steadily, it is expected to contribute more than 60 million yuan in profit to China Television in 2013, and the increase in profit growth rate of China Television Media in 2013 is expected to be close to 100%. China Television's media advertising business changed to an agency system, driving a sharp increase in profits. Among the three main businesses of China Television Media, film and television, advertising, and tourism, the film, television, and travel business showed a steady growth trend; in the advertising business, the advertising business profit increased dramatically due to the change in the model of advertising resources for the CCTV Science and Education Channel in 2013 by the subsidiary Shanghai China Television International Advertising Co., Ltd. from a contract system to an agency system. The highlight of the performance growth of the company's existing main business in 2013 was that on the basis that the film, television and tourism businesses maintained steady growth, the change in the advertising business model brought about rapid profit growth effects. The implementation of Kim Young-ma's merger and acquisition plan means that the company has achieved a breakthrough in epitaxial expansion; the company's distribution channel advantages, combined with Jin Yingma's experience in film and television drama investment and production, will effectively consolidate and enhance the company's position in the film and television industry, enhance its overall competitive strength, and bring about an increase in profitability. Risk factors: TV drama subject approval risk; advertising business being impacted by new media advertisements; TV drama distribution failure; risk that acquisition progress falls short of expectations. Investment suggestions: According to the profit level of 53.825 million with a net profit of 53.825 million, produced 8 TV series by Kim Young-ma in 2012; under the assumption that production is generally stable and performance is growing steadily, it is expected to contribute more than 60 million in profit to China Television Media, which will greatly boost performance. In this merger and acquisition plan, the profit forecast for Kim Yung-ma has not yet been completed, and the performance compensation agreement and other details have not yet been announced; we predict that the 2013/14/15 company's net profit for preparing for the 2013/14/15 exam will be 16.5 million/19635 million/233.18 million, respectively. The corresponding diluted EPS is 0.37/0.46/0.54 yuan respectively; reference is comparable to the average valuation level of the company, and taking into account the overall increase in the overall strength brought by Kim Young-ma's merger and acquisition to China Television Media, the overall profit improvement brought by the CCTV advertising model Shake In anticipation, and the launch of a market-based extension development strategy, we gave it 40 times PE in 2014, corresponding to the target price of 18.4 yuan. Considering that the restructuring effect is squeezing the strategic space for actual participation in operations, maintain the company's “increase in holdings” rating.