The incident company issued an announcement on November 21 to sign a “License Agreement” with Jiangsu Radio and Television Group and Shanghai Wenguang Group regarding the transfer of TV broadcasting rights for the first round of “Win the World”. Jiangsu Radio and Television Group and Shanghai Wenguang Group each invested 232.5 million yuan (a total of 465 million yuan) to obtain the first round of “Win the World” TV broadcasting rights (mainland China only) and the right to broadcast on cable and wireless television in the administrative district of Jiangsu Province and Shanghai after three rounds of broadcasting. Comment: The company has made a big splash, and the high growth in performance throughout the year has been verified. The company controls the broadcast rights for the first round of the premium drama project “Win the World”, and the total amount of the two TV stations is 465 million yuan, and the price of a single episode is 62-6.6 million yuan (based on 70-75 episodes). According to the company's announcement, the price of the Internet broadcast rights for “Win the World” is 7.5 million yuan/episode, which totals about 14 million yuan/episode with TV's first-round broadcast rights, for a total price of about 1 billion yuan. At present, “Win the World” has been submitted for review. With the first round of TV broadcasting platforms determined, it is expected that revenue will be confirmed in the fourth quarter. At the same time, the company's boutique drama project “Emergency Doctor” will confirm revenue in the fourth quarter, and projects such as “In the Name of Law” are also expected to confirm revenue in the fourth quarter, ensuring rapid growth in performance throughout the year. The company is rich in reserve projects, which is expected to promote continued rapid growth in performance. According to the company announcement, the company's boutique drama project “Donggong” has already started production and is expected to confirm revenue in 2018; the TV drama projects “A Basket of Parents”, “Singularity”, and “Living with Children” will be launched in the fourth quarter of 2017 and the first quarter of 2018, and are expected to confirm revenue in 2018; the second and third rounds of TV broadcasting rights for the boutique drama “Win the World” are expected to still bring in high revenue in 2018. The company's performance in 2018 continues to grow rapidly. The scale of the video site user payment market is rapidly expanding, and the company expects to benefit fully. According to data published by major online video websites, the total number of paying users is expected to exceed 120 million in 2017, the total number of paying users is expected to exceed 250 million in 2018, and the payment market size is expected to rise to more than 50 billion. Moreover, as major online video sites continue to compete fiercely, the price of premium dramas is expected to rise further, and the company is expected to fully benefit from the production capacity and rich reserves of quality dramas. The implementation of the drama helped the company return capital, and the company promoted the non-public issuance of stocks and bonds in an orderly manner to ensure sufficient cash flow. With the signing and execution of the first round of “Win the World” TV broadcasting rights license contract, the company's cash flow from operating activities is expected to improve. Furthermore, according to the company's announcement, the company is actively promoting the non-public offering of shares (the total capital raised is not more than 818 million yuan) and the issuance of bonds (the issuance scale is no more than 600 million yuan). At present, the yield of the company's projects is generally high. Adequate financial support is conducive to the rapid commercialization of the company's reserve projects and provides a guarantee for the company's performance to continue to grow at a high level in the next few years. Investment suggestions: Although the company has recently been affected by disputes related to “Good Voice”, it focuses on the company's main business. The first broadcast platforms for the 2017 main project “Win the World” on the Internet and TV have been confirmed, and revenue is expected to be confirmed in the fourth quarter of 2017, and the growth in annual performance has been verified; high-quality projects such as “That Year's Blossoming Moon” and “Emergency Doctor” prove that the company has the ability to produce leading dramas, and the company has a large number of reserve projects. It is expected to fully benefit from the further strengthening of the voice of leading content, the continuous rise in online copyright prices, and the expansion and monetization of premium content markets Diversification of methods. As the “Good Voice” dispute may have an impact on the company's performance, we expect the company's net profit for 2017-2019 to be 251 million yuan (380 million yuan after deducting non-recurring profit and loss), 518 million yuan, and 691 million yuan, respectively. The corresponding earnings per share are 0.63 yuan (0.95 yuan after deducting non-recurring profit and loss), 1.30 yuan, and 1.73 yuan respectively. Referring to similar comparable companies, corresponding to the 2018 EPS, a 25X valuation, corresponding to the six-month target price of 32.5 yuan, gave it a “buy-A” rating. Risk warning: The distribution progress of the company's TV drama project is lower than expected; the “Good Voice” project may lead to an increase in the amount of the company's bad debts accrued.