1. Incidents In the first half of 2018, the company achieved total operating income of 2122.1089 million yuan, an increase of 44.77% over the same period last year; net profit attributable to shareholders of listed companies was 277.3711 million yuan, down 35.54% from the same period last year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 252.1847 million yuan, an increase of 151.29% over the same period last year. 2. Our analysis and judgment is that the decline in the company's net profit in the first half of the year compared to the same period is mainly due to a decline in investment income. In the second half of the year, while many movies and TV projects are screened, reality entertainment projects will also gradually enter a harvest period. As the reputation of Huayi Brothers Film World (Suzhou) continues to ferment after opening, future live entertainment projects will continue to contribute stable ticket share revenue to the company. (1) The comprehensive layout of film and television variety arts promotes continuous improvement of the company's main business. The films screened in the first half of the year mainly include the interissue film “Fanghua”, “Former 3: Goodbye Ex” and the film “It's Nice to Meet You”. Among them, “Fanghua” grossed about 220 million yuan during the reporting period, and “Former 3: Goodbye” grossed about 1.64 billion yuan during the reporting period. The TV drama “A Long Time No See You” premiered nationwide on March 26, 2018 on Beijing TV, Oriental TV, and iQiyi. It was broadcast simultaneously on Tencent Video and Youku. Actively participate in investing in major online movies and online dramas to broaden business models. (2) Brand licensing and live entertainment entered the harvest period. Before 2018, the live entertainment business was generally in the “pioneering territory” stage. By the end of 2017, a total of 18 projects had been signed. Huayi Brothers Film World (Suzhou) opened on July 23 this year, and Huayi Brothers Film Town (Changsha), Huayi Brothers Film Town (Nanjing), and Jianye Huayi Brothers Film Town (Zhengzhou) will also open one after another. 2018 will be a year for the performance test of the reality entertainment sector. The four reality parks will become the second batch of live entertainment parks put into operation after Haikou Feng Xiaogang Film Corporation. (3) The sharp decline in investment income was due to the sale of shares last year. During the reporting period, the company's investment income was 49.3851 million yuan, down 90.88% from the same period last year, mainly due to the large base due to the sale of shares in Guangzhou Yinhan last year. 3. Investment recommendations estimate that the company's net profit for the year 18-19 will be 850 million yuan/1.02 billion yuan respectively, corresponding to EPS of 0.31/0.37, and corresponding PE of 18.5x/15.5x, respectively, giving recommended ratings. 4. Risks indicate industry competition risks, industrial policy risks, economic cycle impact risks, etc.