Key investment events: On November 21, Tang De Film and Television announced the first round of the film and television drama “Win the World” to broadcast the main content of the television copyright sales contract and the supplementary agreement to the online copyright sales contract for the project. The final sales situation of “Win the World” is: TV copyright: Jiangsu Satellite TV and Shanghai Oriental TV received the first broadcast rights. The license fees were 232.5 million yuan, for a total of 465 million yuan. Online copyright: Since the drama was broadcast in the first round of the Golden Series on Jiangsu Satellite TV and Oriental TV, the licensing fee for the series was adjusted to RMB 7.5 million. The drama is tentatively scheduled for 60 episodes, with a total provisional total of RMB 450 million (the final episode is based on the number of episodes included in the distribution license or the few episodes broadcast by TV, at most, according to 70 episodes) Comment: “Win the World” first round broadcast online copyright has been settled, and the top headline content is expected to have a positive impact on the company's operating performance and operating cash flow this year. We expect the total sales volume of “Win the World” in the first round to exceed 900 million yuan. Combined with the equity ratio of Tangde Film and Television in the project and the net interest rate level of the film and television industry, we expect “Win the World” to contribute no less than 200 million yuan in net profit to Tang De this year. The signing and execution of the project contract will have a positive impact on Tang De's operating performance and cash flow from operating activities this year. Tang De Film and Television continues to produce a number of phenomenal content to verify its creative and distribution capabilities in the field of top leading movies and TV dramas. We believe that in the future, demand for content in the film and television market will continue to trend upward, and that high-quality content has more bargaining power in the market, so film and television companies that produce high-quality leading content on a sustainable basis have more investment value. In December 2014, “The Legend of Wu Mei Niang”, produced and distributed exclusively by Tang De, began broadcasting. The drama continued to set ratings records for the same period during the broadcast period and won the title of the top ten influential TV dramas of the year at the 2015 National Drama Festival; in August 2017, “That Year's Flowers Blossomed, and the Moon Was Happy”, directed by Ding Hei, who exclusively signed by Tang De, was broadcast on Oriental TV and Jiangsu TV. The ratings for the two stations soared and broke 3%; in October 2017, Tang De signed exclusively by Tang De “Emergency Doctor”, created with the participation of screenwriter Juan Zi, is on Oriental TV It began broadcasting with Beijing TV, and remained at the top of the ratings during the broadcast period. The company's film and television talents gather, reserve a wealth of film and television projects, and facilitate future development. As a comprehensive film and television group, Tangde Film and Television has an enlightened mindset for win-win cooperation with industry talents. Its producers, directors, screenwriters, entertainers and other talents gather, and there is no shortage of leading domestic creators and stars, such as Gao Yijun, Ding Hei, Xu Hongyu, Wei Zi, Juan Zi, Fan Bingbing, Zhao Wei, and Zhang Fengyi, to form Tangde Film's future soft power in market competition. Furthermore, the company currently has a wealth of film and television projects in reserve, laying the foundation for the company's long-term growth in the future. According to Tangde Film and Television's announcements, public information, and our analysis and judgment, we expect the company to have prepared no less than 20 film and television projects in 2017 and 2018. The impact of the copyright change in “... Good Voice” on Tang De may be a one-off event. In the future, the company will continue to explore and develop variety shows. On November 9, Tang De Film and Television announced the progress of the agreement relating to “... Good Voice” and detailed information on the relevant risks. We believe that the current main source of business performance of Tangde Film and Television is the film and television drama sector, the variety sector is the expansion of the company's new business, and Good Voice is one of the company's variety program reserve projects. Therefore, the change in this project may be a one-off event, and it is expected that the impact on the company's long-term sustainable profitability in the future will be weak. Since Mr. Wu Hongliang, chairman of Tangde Film and Television, promised that if the company is ruled to pay the remaining 41.25 million US dollars in license fees, Mr. Wu Hongliang will assume the payment obligation to ensure that the company does not suffer financial losses as a result. We expect that from the most prudent point of view, the license fee of 18.75 million US dollars and related taxes that the company has already paid to Talpa may not be recovered. This part of the capital may account for asset impairment losses, which may have an impact on this year's net profit. The development prospects of Tangde Film and Television are improving, and we continue to focus on recommendations. We believe that the fundamentals and performance of Tang De Film and Television are on the rise and with high certainty. At the same time, it has an advanced strategic layout pattern. The content production side has already entered three major fields, and each field has phenomenal project reserves (quality dramas, movies, and variety shows). At the same time, Tang De is actively targeting offline channel layout (cinema). Currently, the theater layout is in the early stages, and is expected to become a new growth point for the company's business and performance in the future. Profit forecast and investment advice: Profit forecast: We previously anticipated that Tangde Film and Television would achieve net profit of 380 million yuan and 560 million dollars respectively in 2017 and 2018. Since Tangde Film and Television has already paid $18.75 million in license fees and related taxes for the Good Sound Project, and there is some uncertainty about the project's contribution to future earnings, we have adjusted the company's 2017 and 2018 profit forecasts from a prudent perspective. Referring to the film and television projects that Tangde Film and Television plans to invest in production and participate in production in 2017 and 2018, we expect Tangde Film and Television to achieve net profit attributable to the parent company of 219 million yuan and 501 million yuan respectively in 2017-2018 (the factors affecting profit in 2017 are only measured by asset impairment of Good Sound Project). According to the estimate of the company's current total share capital of 400 million shares, we expect the company's EPS for 2017-2018 to be 0.55 yuan and 1.25 yuan, respectively. Investment advice: We believe that in the future, Tang De Film and Television will perform well in the fields of phenomenal leading content (TV series, movies, and variety shows) production and distribution, channel resource layout, artist brokerage business upgrades, new Internet media exploration, overseas strategic layout, and pan-entertainment platform construction. The company uses the capital market to enter a new stage of rapid growth, and is expected to become a dark horse in the media sector and buy ratings. Risk warning: The broadcast results of films such as “Win the World” fell short of expectations; the impact of A-share market sentiment and financial aspects; regulatory policy risks; and the risk of declining profitability due to rising production costs for film and television content.