Items:

On January 15, the company issued a forecast of its annual performance in 2017. it is expected that the company will achieve a net profit of 200-250 million in 2017, an increase of 11.66%, 39.57%, and 11 million yuan in non-recurring profit and loss in 2017. The net profit is 1.89-239 million, an increase of 15% over the same period last year.

Main points of investment

The company's net profit is expected to increase in 1.2017, mainly contributed by a number of TV dramas such as the Legend of Ba Qing.

The company expects to achieve a net profit of about 200 million to 250 million in 2017, an increase of 11.66% to 39.57% over the same period last year, while net profit after deduction is between 1.89% and 239 million, an increase of 15% over the same period last year. The company's performance growth mainly comes from a number of TV dramas such as the Legend of Ba Qing and the full moon in bloom that year. If the negative impact of the "The Voice of China" project is excluded, the company's net profit should be between 3.4 and 390 million yuan. After this impairment, the cooperation between the company and Talpa is terminated, and there will be no impairment risk in 2018 and beyond.

two。 The actual controllers of the company continue to increase their holdings of the company's shares, demonstrating their confidence in the company.

Following the cumulative increase of 20.05 million of the company's shares from November 29 to December 4, 2017, Mr. Wu Hongliang, the company's controlling shareholder and actual controller, intends to increase the company's shares within 12 months from December 11, by an amount of not less than 30 million. Demonstrate the confidence and recognition of the actual controller of the company.

More than 3.2018 blockbuster works are expected to be released and launched, with many bright spots.

On TV series, the second and third rounds of the Legend of Ba Qing are expected to continue to bring profits for the company, which has reserves such as "Donggong", "Manmenqingluo" and "with your son". In the film, the company's "very accomplices" and "Little Ma Polly" are expected to be released. In the variety show, we will continue to promote projects such as "unseen love".

4. Investment suggestion

Due to the low base caused by the impairment of the "The Voice of China" project in 2017, but with the arrival of the "East Palace" and other boutique dramas in 2018, the company is expected to achieve greater profit growth. We adjust our profit forecasts for 2017 and 2018. It is estimated that the EPS of the company in 2017-2018 will be 0.54 / 1.20 yuan (the original forecast is 0.96 / 1.28 yuan), corresponding to 32 / 15 times of PE, maintaining the "recommended" rating.

5. Risk hint

With the intensification of competition in the film and TV drama business, the audit risk of the film and TV drama will definitely increase.