Key investment points: upgrade the entire industry chain to create the world's leading IP monetization platform. At the beginning of the company's listing, the company mainly produced and sold apparel and accessories products based on animated images (game/COS), and was at the bottom of the IP derivatives monetization ecosystem. Since 2013, the company's positioning has been transformed and upgraded from an “animation derivatives manufacturer” to a “global IP monetization ecosystem”. At present, the company's business has penetrated the entire IP monetization industry chain such as animation, games, film and television, children's dramas, derivatives, 2D, and VR/AR. In recent years, with the gradual improvement of the layout, the collaborative effects of various businesses have been remarkable, and performance has exploded. 2013-2016, the revenue CAGR was 40% and the net profit CAGR was 66%. The share of high-margin businesses such as animation/games and proprietary derivatives, which have high gross margins, continues to increase, driving a continuous increase in the company's profitability (gross margin and net profit margin). Invest in global toy giant JAKKS to enter the global derivatives market. In February and April 2017, the company obtained 19.50% of JakkPacific, Inc.'s shares from the secondary market and additional issuance through Meisheng's Hong Kong subsidiary, respectively, and became its largest shareholder. JAKKS is the world's leading toy designer and retailer, ranking third in size after Mattel and Hasbro in the US; it has a rich range of products, has many popular IP licenses from Disney, Nintendo, etc., and has formed long-term good cooperative relationships with mainstream channels in the US such as Walmart and Toys R Us. The investment in JAKKS is also an important step in the layout of Meisheng's entire overseas IP industry chain. The strong joint investment is worth looking forward to: on the one hand, it complements Meisheng's R&D and design capabilities in all categories and greatly helps it obtain the world's top IP; on the other hand, since JAKKS has extensive upstream supply chain and downstream channel resources, Meisheng is expected to strengthen its supply chain integration capabilities and channel control capabilities through deeper cooperation with Jakks. The strategy focuses on collaboration, and a leading derivatives monetization platform is ready to be launched. The company has basically built a whole industry chain of “own IP+content production+content distribution and operation+new media operation+derivatives development and design+online and offline retail channels”. Relying on solid supply chain management capabilities, the company has deployed overseas to make up for shortcomings, and the world's leading derivatives monetization leader is ready to emerge. On the IP side, self-built (relying on Meisheng games, such as “Star Academy”) +investment (leading IP peers, demons, etc.) + licensing (Disney, Marvel, Nintendo, etc.) to form an IP library; in terms of full category development, game services ODM capabilities are leading in the world, JAKKS has made up for shortcomings, achieved category expansion, and transformation and upgrading from simple manufacturing to supply chain management; in terms of channels, domestically, Jack Smash has laid out traditional domestic batch channels, and Youwo is the largest two-dimensional e-commerce in China, and has gone offline in 1001 night Experience new business formats; overseas: own the US CostumeCraze has 60% of its shares. It is involved in sales related to cosplay, festivals, and party clothing and accessories, invests in JAKKS, and expands traditional large-scale retailers such as Walmart and Toys R Us, gradually building a full range of domestic and international, online and offline channels. Profit forecasts and investment advice. We expect that with the expansion of categories, from simple manufacturing to supply chain management upgrades, the release of Frozen 2 next year is expected to give a big boost to the company's performance. True fun also shows that the increase in the share of high-margin gaming business will significantly increase the level of gross margin. We raised our profit forecast. The 2017-2019 EPS is expected to be 0.46/0.69/0.97 yuan/share (originally 0.44, 0.54 and 0.60 yuan/share), respectively, giving the company 32 times PE in 2018, corresponding to the target price of 22.08 yuan/share, maintaining the buying rating. Major uncertainties: termination of brand image authorization; exchange rate risk, failure to fully and effectively integrate foreign investment project resources or performance falls short of expectations; poor connection between IP image and monetization channels, etc.