Matters: On the evening of March 5, the company released its 2017 financial report. It achieved full-year operating income of 1,321 billion yuan, an increase of 42.57% over the previous year; net profit of 310 million yuan, a year-on-year decrease of 40.59%; net profit after deducting non-return net profit of 300 million yuan, an increase of 64.44% over the previous year. The company's EPS was 0.43 yuan, down 50% from the previous year, and the company's profit distribution policy was 0.41 yuan per 10 shares. Investment points In 1.17, the company's revenue increased by 42.57% year on year, and net profit decreased by 40.59% year on year. In 2017, the company achieved revenue of 1,321 billion yuan, an increase of 42.57% over the previous year, mainly due to the large increase in revenue in the company's film and television culture business sector; net profit after deduction of 310 million yuan, a year-on-year decrease of 40.59%; net profit after deduction of 300 million yuan, an increase of 64.44% year-on-year, mainly due to the rapid growth in film and television culture business, and main business revenue and profit. 2. The film and television culture business is the main force. The performance promises of the three gambling companies have all been fulfilled during the reporting period. The revenue of the film and television culture business was 1,232 billion yuan, an increase of 53.34% over the previous year, accounting for 93.24% of revenue. The company's movie performance was impressive. Wolf Warrior 2 ended with a box office of 5.683 billion dollars, bringing the company 300 million dollars in revenue. 3. Development plan for 2018: There are plenty of reserves of film and television drama projects, and the annual results are worth looking forward to on the film side. In terms of movies and television projects to be screened in 2018, the “Fengshen Trilogy” is progressing smoothly, and the “Fengshen Trilogy” is being actively prepared; in terms of TV dramas, the company is developing around IP, and the Kyushu series and criminal investigation series are making concerted efforts, and many series such as “Wudong Qiankun” will be launched one after another. 4. Investment recommendations The company's film and television culture business performed well in '17. The film sector was very impressive, and the company's film and television project reserves were abundant in '18. We expect the company's EPS in 2018-2019 to be 0.61/0.69 yuan, and the corresponding PE is 19/17 times, which is slightly lower than the current average valuation of film and television by 21 times, maintaining the “recommended” rating. 5. Risk suggests that competition in the film and television drama business is intensifying. There is a risk of film and television drama review, and competition in tourist attractions is also clearly intensifying.