Core viewpoints

(1) the company focuses on the three major sectors of pan-entertainment, education and culture, and takes games and book publishing as the main source of revenue. In the first half of 2018, the company achieved 405 million yuan in revenue, an increase of 11.66% over the same period last year, and the net profit of returning to its mother was 137 million yuan, an increase of 24.05% over the same period last year. Among them, the profit from the acquisition of Hainan Adventure shares was 51 million, and the government subsidy was 6.22 million. From the perspective of specific business segments, the revenue from mobile games was 294 million yuan, up 25.49% from the same period last year, accounting for 72.55% of the total income, and the gross profit margin was 48.41%, down 29.36% from the same period last year. This is mainly due to the high cost of the agent game "Qingyunji" and the increase in operating income. In the game sector, the combined net profit of the subsidiary Youai Network is 131 million yuan, an increase of 107.05% over the same period last year. In the book publishing and distribution business, the operating income was 111 million yuan, down 13.52% from the same period last year, accounting for 27.45% of the income, and the gross profit margin was 31.35%.

(2) the game section takes the purchase volume as the starting point, and enhances the research and transportation ability by focusing on MMO, SLG, card, tower defense and other categories. In terms of self-research, the company launched "Supreme Master" and "Journey to the West" in the first half of the year, updating "the rise of the Empire of Da Qin" and "doomsday siege"; in terms of agency, the monthly flow of "Qingyun formula" was maintained at more than 120 million. During the reporting period, revenue was 121 million yuan, accounting for 41.26% of game revenue. Among them, Q1 and Q2 paying users are 577000 and 326000 respectively, and the ARPU value is 703.37 yuan and 694.51 yuan. The follow-up "Qingyun Formula 2" will be released after the approval of the version number; in addition, the company has signed a contract this year for products such as "Changshengyuan", "Eternal Dragon Riding" and "Elf struggle for hegemony" to be launched. In addition, the company added "Xunqin Ji" and other IP resources.

(3) the bright spots of education and books remain to be dug. 2018H1, Tianzhou Creator Education includes many hot projects such as 3D printing, intelligent programming, VR, robot and so on, and provides 3D education hardware equipment and supporting services for the construction of creator laboratories in primary and secondary schools. At present, the company has signed cooperation agreements with nearly ten primary and secondary schools in the province, and received 3000 + people during the summer vacation of founder training. In terms of publishing, the people's Tianzhou took the lead in going to sea, publishing English, French, and Arabic versions of more than 40 books, including the interpretation of the basic problems of Xi Jinping's thoughts and the Biography of Tu Youyou. In July, the China Children's Press and publication Association has been approved to invest in the people's Tianzhou, and the people's Tianzhou will also acquire Millie Molly Children's Publishing Group, a famous brand of children's books in New Zealand. Tianzhou education and publication are worth looking forward to.