The overall performance of the China News is insipid, and the performance of the marketing section is eye-catching. In the first half of 2017, the company's operating income was 875 million yuan, down 20.19 percent from the same period last year; the total profit was 82 million yuan, down 17.88 percent from the same period last year; and the net profit belonging to shareholders of listed companies was 65 million yuan, down 29.43 percent from the same period last year. In terms of business, the film and television sector achieved revenue of 242 million yuan, accounting for 27.66%, an increase of 1.47% over the same period last year, while the variety sector achieved revenue of 92 million yuan, accounting for 10.52%, down 76.06% from the same period last year. The marketing sector achieved revenue of 476 million yuan, accounting for 54.4%, an increase of 45.61% over the same period last year, and the sports sector achieved revenue of 64 million yuan, accounting for 7.31%, down 56.28% over the same period last year.

Film and television to start a younger, network transformation, to create high-quality film and television works. In the first half of 2017, the top five film and television works by the company's main business revenue included the second season of the variety program "Crossing King", the TV series "Qin Shili Ming Yue Xin", "the late Night Canteen", the movie "the kidnapper" and the TV series "the Hunter", with a total income of 314 million yuan, accounting for 35.89%. At present, the company's investment in the production of TV dramas such as "the workplace is a technical job", "late-night canteen" and "Qin Shili's Mingyue Heart" have also been broadcast for the first time.

Adhere to the media entertainment content as the core, multi-plate coordinated development. The company continues to deepen the horizontal coordination among film and television, variety and sports, and the vertical coordination among content, media and customers. (1) in terms of film and television, the motivational drama "the Workplace is a Technical Job" and the urban emotional drama "late Night Canteen" were broadcast one after another in the first half of 2017, and the costume drama "Qin Shili Ming Yue Heart" was launched on Zhejiang Satellite TV and Youku on August 14, 2017. Plays such as "I am not an Elite" and "Mangqinglou" have obtained distribution licenses during the reporting period, and high-quality projects such as "bystander" and "mind Reading" are actively preparing or shooting the production stage. it has laid the foundation for the sustained, rapid and healthy development of the film and television sector in the future. (2) in terms of variety, the audience performance of "Crossing King" continued to improve in the second quarter, with a rating of 2.14% in CMS35 City in the first half of the finals. "National Film Premiere" is being broadcast on the CCTV Film Channel, with the film theme as the core and the "national film" as the content, which is not only innovative but also represents the local characteristics of Chinese variety arts. In addition, original projects such as the second season of "Tornado filial son" and "Town Story" are expected to be broadcast in the second half of 2017. (3) in sports, we continue to maintain business cooperation with many top domestic sports resources such as China Football Association Cup, China team, Chinese Super League and European basketball, as well as high-quality customer resources such as Jin Li and Skyworth in sports content marketing, which has further promoted the deep integration of IP of the European Basketball Champions League with the Chinese market and various media.

Profit forecast. In the second half of 2017, the company will continue to promote the strategic layout of multi-sector coordinated development with media entertainment content as the core, and make use of the rich accumulation of entertainment and sports resources to continuously create high-quality content of popular cultural and entertainment styles. To achieve film and television + variety + sports + integrated marketing in-depth coordination and comprehensive blossom. We estimate that the EPS of the company from 2017 to 2019 is 0.58,0.77 and 0.98 yuan respectively. With reference to the valuation level of the same industry, considering the obvious endogenous advantages of the company's film and television production and the stable growth of integrated marketing, we give the company a valuation of 38 times in 17 years and give an overweight rating corresponding to the target price of 22.1 yuan.

Risk hint. Increased competition in the industry, regulatory policy risks.