Incidents: 18H1 net profit after deducting non-net profit increased 151% year on year, performance close to forecast limit The company announced that 2018 H1 achieved total operating income of 2.122 billion yuan, up 44.77% year on year; net profit attributable to shareholders of listed companies was 277 million yuan, down 35.54% year on year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 252 million yuan, up 151.29% year on year; non-net profit was close to the forecast limit, performance was in line with expectations. High-quality films led to a sharp increase in revenue from the 18H1 film and television business, with plenty of films to be screened in the second half of the year 1) The company's 2018 H1 film and television business achieved revenue of 1,962 billion yuan, a sharp increase of 94.54% over the previous year, mainly driven by high-grossing films such as “Fanghua” and “Former 3”; 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. In addition, in terms of movies and TV dramas, 18H1 participated in the TV drama “Long Time No See You”, the “Former Series,” and the web drama “Hi! A number of films have been screened, such as “The Last Man” and the online blockbuster “The Courier.” 2) Looking ahead to 18H2, “Di Renjie: The Four Kings” produced by the company in July has been screened. In the future, there will be a series of films such as “Finding You”, a heart-warming film with a realistic theme, “Children of the River and Lake” (which has been shortlisted for the main competition section of the 71st Cannes Film Festival as the only representative of Chinese-language films), and the “Haunted Light” series “Buggy Valley in Yunnan” (the number of people who want to see it has exceeded 40,000) will be screened one after another; the 2019 reserve project “Babai” (which has already reached the blue) (Post-production stage) “Onmyoji”, “Paint Skin 3,” “Captain Toukin,” and “Cell Phone 2” product line Rich. It is expected that 18-19 will be a big year for the film product line, which is expected to continue to contribute to the elasticity of the main business performance. The reality entertainment business has gradually entered a period of implementation, and the company's profit structure has developed healthily 1) The company's 2018 H1 reality entertainment business achieved revenue of 141 million yuan, a year-on-year decrease of 28.40%; mainly due to differences in time in the progress of various projects. Suzhou Film World opened on July 23. Up to now, the maximum number of visitors per day has reached nearly 10,000; projects in Changsha, Nanjing and Zhengzhou are also expected to open one after another during the year. 2) The company's 18H1 investment income was 49 million yuan (mainly confirmation of the investment income of Yinhan and Hero Entertainment), a year-on-year decrease of 90.88%, mainly due to the high investment income brought by the sale of some shares in Yinhan Technology in the same period last year; the main business, centered on 18H1 film, television, and reality entertainment, accounted for 90% of profit, driving a recovery in operating cash flow to 423 million, and improving profit quality. The profit forecast and valuation rating forecast EPS for 2017-19 were 0.38/0.47/0.58 yuan, respectively, corresponding to 15/12/10 times PE. It is optimistic that the company's film business will pick up and live entertainment projects will be implemented one after another. Currently, it is at the bottom of the valuation, maintaining the “increase in holdings” rating. Risk warning: The main projection depends on project progress, box office falls short of expectations; theme park traffic falls short of expectations, etc.