The interim report deducted a high increase in net profit from non-return mothers, mainly due to the increase in the film and television business and the divestment of the toy business, which led to a decrease in fees. Revenue from the semi-annual report for '17 was 387 million, up 8.85% year on year; net profit was 153 million yuan, up 71.84% year on year; net profit after deducting non-return mother was 133 million, up 51.07% year on year. In the reporting period, sales expenses were 7.35 million yuan, down 58.2% from the previous year, mainly due to the divestment of the toy business and the reduction in film and television advertising expenses; management expenses were 386.8838 million, down 33.81% from the previous year, mainly due to the divestment of the toy business. Major subsidiaries achieved net profit of 31.2243 million in the first wave (Fengyun Interactive net profit of 103.13,500 million (net profit commitment of 56.25 million for the whole year after deducting non-return to the mother), and Xingshengyuan achieved net profit of 118 million yuan (annual net profit commitment of 165 million dollars after deducting non-return to the mother). From January to September '17, the net profit range is expected to return to $212-291 million (a year-on-year increase of 35% to 85%). The film and television business is growing rapidly, and many games are expected to be released in the second half of the year. During the reporting period, the TV drama business achieved 323 million dollars in revenue, up 36% from the previous year, accounting for 83% of revenue, mainly due to the confirmation of **** revenue for the first and second seasons of “That Starry Sky, That Sea of Stars”; the second season of “That Starry Sky, That Sea” is scheduled to be broadcast on multiple platforms such as Hunan TV, iQiyi, and Sohu in the third quarter. The game business had revenue of 62.719,800 million, a decrease of 15% over the previous year; it independently developed games such as the “Sacred War” mobile game, the “Titan Kingdoms” mobile game, the “Doulo Continent 2D” page game, “Desperate Age H5,” and “School Flower's Personal Master H5,” and it is planned to launch operations in the second half of '17. Actively expand upstream IP and completely transform media and entertainment through downstream multi-content development. In 2016, the company invested an additional 40 million yuan in Chuangyue Culture through the first wave of its wholly-owned subsidiaries, holding 30% of the shares. Chuangyue Culture and Beijing Qihu signed a capital increase agreement to increase capital for Huayue Culture, a subsidiary of Chuangyue Culture, and signed a “Cooperation Agreement” with Fu Qiang and the first wave to jointly cooperate to develop Internet reading-related business using Huayue Culture as a platform. The company joined hands with Qihu 360 to achieve resource cooperation and sharing in fields related to online reading, which is conducive to the company's layout and operation development in the field of online literature IP. At the same time in '16, the company acquired 49.6% of the shares of game development company Fengyun Interactive with 313 million yuan to achieve 100% shareholding. The net profit deductions from non-return promises in 16-19 were 45 million, 56.25 million, 67.5 million, and 78.3 million, respectively, effectively strengthening the first-wave + Fengyun interactive game development and distribution industry chain layout. In July '17, the subsidiary Xingshengyuan invested 10% of Dongyang Mandala's shares with 200 million yuan in cash. In 17-19, net profit of 50 million yuan, 200 million and 250 million dollars was deducted from the non-return mother, focusing on TV dramas, variety shows, and artist brokerage services. Profit forecasting and valuation models. In June '17, it was announced that it was proposed to raise 1.2 billion dollars through a non-public stock offering, all of which will be used for the production and development of 4 TV dramas and 5 web dramas. We are optimistic about the company's comprehensive cultural transformation and at the same time actively extending the pan-entertainment investment layout. The company expects net profit of 341 million yuan and 409 million yuan in 2017 and 2018, corresponding to EPS of 0.4 yuan and 0.48 yuan, respectively. Referring to the industry average, the company was given 30 times PE for 17 years, corresponding to the target price of 12 yuan, and maintained the buying rating. Risk warning. The development of the game business fell short of expectations; extension expansion fell short of expectations.