Incident: The company issued an announcement on December 28, 2017. The actual controller, Mr. Wu Hongliang, used his own funds to increase his holdings of the company's shares by a total of 30,000 shares through centralized bidding on December 26, 2017, accounting for 0.008% of the company's total share capital and an increase of 565,700 yuan. Comments:1. The actual controller continued to increase its shareholding in the company, demonstrating confidence in the company's development. From November 29 to December 26, 2017, the actual controllers of the company increased their holdings of the company by a total of 1.76 million shares, accounting for 0.44% of the company's total share capital, with a cumulative increase of 34.555 million yuan, fully demonstrating their confidence in the company's future performance growth and development prospects, and safeguarding the company's shareholders' rights and interests. 2. From a short-term perspective: 1) According to information released by the company to the outside world, the company's drama “Win the World” (now renamed “The Legend of Baqing”) has obtained a distribution license and confirmed the first broadcast platform. It is expected that revenue will be confirmed in the fourth quarter of 2017, and the high annual performance growth is expected to be verified; after excluding the impact of “Good Voice,” we expect the company's net profit in 2017 to be 370 million yuan, an increase of nearly 100% over the previous year. 2) The high performance growth stemmed from the company beginning a period of rapid growth, and the number and scale of projects increased markedly. According to the project schedule in the company announcement, revenue from projects such as “Win the World” overseas and TV rounds 2 and 3, “That Year Blossoms” overseas and TV round 2 and 3, “Feng Zicai”, and “We Are Young in Wartime” is expected to be confirmed in the first half of 2018. Under the low year-on-year base, it is expected that the company will achieve high growth and break through seasonal shackles; and the company has launched and is currently planning to launch projects “Orient Palace”, “Anaya Love”, “All Alone in Love”, and “Suzaku” are expected to boost companies such as Performance continued to grow at a high rate in 2018-2019. 3) Influenced by “Good Voice”, the company's current valuation is low. The closing price on December 28, 2017 corresponds to a net profit of only 16.6 times PE in 2018, regardless of the increase in issuance, and only 18 times PE when considering the increase in issuance. 3. Long-term view: 1) Outstanding production and distribution capabilities, abundant reserve projects and continuous expansion. Since its establishment, the company has produced dozens of TV dramas, most of which have been broadcast on premium TV channels, and a number of productions have received the highest ratings at the same time. According to CMS data, “Radio Waves That Never Die” produced by the company in 2010 was broadcast on CCTV's comprehensive channel and ranked first in ratings during the same period; “Glorious Land” produced by the company in 2012 was broadcast on Beijing TV's gold program, ranking first in the Beijing region's gold TV ratings; “After Naked Marriage”, produced by the company in 2014, was broadcast on Zhejiang TV, ranking first in ratings in the same period; at the end of 2014, the company's blockbuster drama “The Legend of Wu Mei Niang” had over 10 billion hits on the Internet, with 2.14 nationwide ratings on the first day of broadcast, average ratings reached 3.1, finale With a ratings rating of 5.08%, it ranked first in ratings during the same period, and became the TV drama with the highest ratings in the past ten years other than “In the Name of the People”. The company's quality production capabilities have been recognized by the industry. According to the company announcement, the company's flagship drama “Win the World” in 2017 was determined to be broadcast on Youku, Jiangsu Satellite TV, and Oriental TV. The total price of the first broadcast rights on the Internet and TV was nearly 14 million yuan. Among them, the price of a single episode of the first broadcast rights on TV exceeded 6 million yuan, a record high within the startup. The company has various projects such as “Orient Palace”, “The Wild Rose”, “Suzaku”, “Meet the Child”, and “The Mysterious Taxi” in progress, and has dozens of original screenplays in reserve. Since the company has the ability to produce quality dramas, it is expected that it will continue to produce quality works. 2) The company uses a pipeline production model to stably output quality products, which is in line with the development trend of industrialization in the film and television industry. Unlike traditional TV drama companies in China that use studio production, the company uses a production line segmented production model, that is, the company appoints the most professional person to complete every step, including the producer, director, screenwriter, etc. Under this model, on the one hand, the company can directly control all aspects and better control costs, thereby ensuring that the gross margin of the company's project is at a high level in the industry; on the other hand, the company can guarantee that all aspects are highly specialized, thereby improving the overall quality of the work; and the assembly line model is conducive to large-scale, continuous and stable output of quality products, in line with the development trend of industrialization in the film and television industry, and fully unleashes the company's production capacity. 3) Top professional teams continue to flow in to ensure the output of quality projects. According to the company announcement and official website, at the beginning of the company's listing in 2015, the company had established a stable and long-term cooperative relationship with famous screenwriters Sheng Heyu, Qi Xing, Liu Hua, famous directors Huo Jianqi, Gao Yijun, and Teng Wenji, and famous actors Fan Bingbing, Zhao Wei, Zhang Fengyi, and Wei Zi through hiring, investment, and establishment of joint ventures; in 2016, the company established a stable and long-term cooperative relationship with famous screenwriter Wang Mingjuan, famous film editor and director Xu Hongyu, and senior director of the Sun Yin, Veteran film distributor Zhao Jun and many other industry professionals have established a long-term Cooperative relationships; In 2017, the company once again established long-term partnerships with well-known actor Wang Zhifei and his team, famous producer Jia Xiaohu, senior program director Du Yan, and many other industry professionals or professional teams through the establishment of joint ventures. By gathering various top teams, the company can guarantee the high level of professionalism in every step of its assembly line production, thereby ensuring the quality of the work and continuously exporting quality products. Investment suggestions: With the implementation of projects such as the company's drama “Win the World” one by one, the high growth of performance in 2017 has been verified; the company has strong quality content production and distribution capabilities, and rich project reserves, and is expected to continue to launch hits; under the assembly line production model, the company continues to introduce professional teams to ensure a high level of specialization in all aspects, which is expected to fully release production capacity and increase the production volume of quality dramas while ensuring the quality of the work. As the “Good Voice” dispute may have an impact on the company's performance, we expect the company's net profit in 2017 and 2018 to be 231 million yuan (net profit after excluding the impact of “Good Voice” is estimated to be 370 million yuan) and 480 million yuan, respectively. The corresponding earnings per share are 0.58 yuan (0.93 yuan after excluding the impact of “Good Voice”) and 1.20 yuan, respectively. Referring to similar comparable companies for 2018 EPS, they gave a 25X valuation, corresponding to a six-month target price of 30 yuan, maintaining 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.