Event: The company achieved revenue of 387 million yuan in 2017, an increase of 9% over the previous year; net profit after deducting non-return from the mother was 133 million, an increase of 51% over the previous year. The net profit range for January to September 2017 is forecast to be $212-291 million, an increase of 35%-85% over the previous year. The film and television business performed well, with “fixed increase+investment” to expand production capacity and is full of momentum 1) 17H1's TV drama business revenue (Dream Star Garden) was 320 million yuan, an increase of 35.6% over the previous year; it achieved net profit of 120 million yuan, fulfilling 71.4% of the annual performance promise. It mainly contributed revenue from TV sales in the first and second seasons of “That Starry Sky, That Sea”. The second season is expected to be broadcast on Hunan TV and Internet platforms such as iQiyi and Sohu in 2017 Q3. 2) With a capital increase of mandala and an additional 1.2 billion yuan, the boutique drama business is expected to continue to gain strength. 17H1 Dream Star Garden plans to increase the capital of Dongyang Mandala by 200 million yuan, holding 10% of its shares after the capital increase; Mandala has high-quality and mature resources in the film and television industry (Zhang Yuxin, Tang Rui, Cheng Yang) to further enhance the company's quality drama production capabilities. At the same time, the company plans to raise an additional 1.2 billion dollars for 4 TV series, 5 web dramas, and projects, with a total investment of 2 billion yuan. After the company expands its team and strengthens its financial strength, it is expected that its production capacity for premium dramas will continue to increase. The game business strategy was adjusted, and the second half of the year was rich in projects. The game business of 2017H1 companies (first wave) achieved revenue of 62.72 million and net profit of 31.22 million yuan. At the same time, the company divested Thumb Play, which mainly focuses on the distribution business. In the future, the company is expected to focus on IP games and high-quality game investment business. 2017H2 has set up independent projects to develop the “Sacred War” mobile game, the “Three Kingdoms” mobile game, the “Doulo Continent 2D” page game, “The Desolate Era H5”, and “School Flower's Personal Master H5”, etc. and plans to launch operations and enter the harvest period. With the divestment of traditional business, the cost rate dropped significantly, and profitability was further enhanced. The company divested the traditional toy business in October 2016, achieving a complete transformation from a “consumer” company to a “cultural” company, with obvious results. 2017H1's sales expenses and management expenses fell sharply by 58.2% and 33.8%, respectively, over the same period last year, and the net sales interest rate reached 40.6%. The profit forecast and valuation rating forecasting company's 2017-19 EPS was 0.43/0.54/0.66 yuan, respectively, and the corresponding PE was 21/17/14 times, respectively. Optimistic about the continued growth of the company's boutique drama business, it gave a target price of 10.38 yuan (corresponding to 24 times dynamic PE in 2017), maintaining an increase in holdings rating. Risk warning: The performance of movies, TV dramas/games falls short of expectations, and project progress falls short of expectations