On December 4, Tangde Film and Television issued an announcement. The actual controller of the company, Mr. Wu Hongliang, used his own funds to increase his holdings of the company through centralized bidding transactions on the Shenzhen Stock Exchange on November 29, November 30, and December 4, 2017, respectively. The cumulative increase in holdings was 1 million shares, accounting for 0.25% of the company's total share capital. The average increase price was 20.04 yuan/share, and the increase amount was 2005 million yuan. The plan to increase holdings announced on July 20, 2017 has been completed. Comment: The actual controller continues to increase the company's shares, demonstrating confidence in the company's development. On July 20, 2017, the company issued an announcement. The actual controller, Mr. Wu Hongliang, plans to increase his holdings of the company's shares through the Shenzhen Stock Exchange trading system within 12 months from July 21, 2017 through self-financing. The increase in holdings is no more than 20 million yuan, and the cumulative increase ratio is not more than 2% of the company's total share capital. As of December 4, 2017, Mr. Wu Hongliang has increased his holdings of the company by 1 million shares, accounting for 0.25% of the company's total share capital, to an increase of 5 million yuan. He has completed the plan to increase his holdings, fully demonstrating his confidence in the company's future performance growth and the company's development prospects. The company successfully passed the review, and the profit from its main business increased significantly throughout the year. The company's 2017 premium drama “Win the World” has successfully passed the review and obtained a distribution license. With the determination of the Internet broadcast platform (Youku) and TV's first broadcast platform (Jiangsu TV, Shanghai Oriental TV), revenue is expected to be confirmed in the fourth quarter. According to the company's announcement, the total price of the first broadcast rights for the TV show is 465 million yuan, the price of the Internet broadcast rights is about 525 million yuan (7.5 million per episode, based on 70 episodes), the total price of the first broadcast rights for the Internet and TV is nearly 1 billion yuan, and the total price of a single episode is about 14 million yuan, which will contribute greatly to the company's performance growth in 2017. At the same time, the company's boutique drama project “Emergency Doctor” has completed the first broadcast, and revenue was confirmed in the fourth quarter, which helped the company's main business grow rapidly throughout the year. The company is rich in reserve projects and is expected to fully benefit from the rapid expansion of the video payment market. 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 continue to bring in high revenue in 2018. The company's performance in 2018 is expected to continue to grow rapidly. 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. 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. 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 platform for the Internet and TV, which is the main project “Win the World” in 2017, has confirmed and successfully obtained a distribution license. It is expected that revenue will be confirmed in the fourth quarter of 2017, and annual performance growth 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. Furthermore, the company has a large number of reserve projects, which are expected to fully benefit from the further strengthening of the voice of leading content, the continued rise in online copyright prices, and quality products. The content market capacity has expanded and monetization methods have been diversified; the company's actual controllers have increased their holdings of the company's shares, fully demonstrating their confidence in the company's development. 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 251 million yuan (380 million yuan after deducting non-recurring profit and loss) and 518 million yuan, respectively. The corresponding earnings per share are 0.63 yuan (0.95 yuan after deducting non-recurring profit and loss) and 1.30 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.