Event description The company announced interim results on 8.24. During the reporting period, the company achieved operating income of 2.122 billion yuan, an increase of 44.77% over the previous year, and realized net profit attributable to the parent company of a listed company of 277 million yuan, a decrease of 35.54% over the previous year. Incident review investment income declined, and after deduction, performance growth was strong. 1) Affected by the high base of equity transfer income confirmed by Yinhan Technology in the same period last year, the company's investment income during the reporting period was 49.3851 million yuan, YOY -90.88%, resulting in a year-on-year decline in the company's parent's performance; however, net profit after deduction was 252.1847 million yuan, and YOY 151.29%. 2) During the reporting period, the company's gross margin was 54.99%, YOY1.33pct. Sales, management, and financial expense ratios all declined to 13.35%, 12.87%, 7.12%, YOY-4.46, -4.66, and -1.90pct, respectively. The film and television sector is picking up, increasing investment in content. 1) During the reporting period, the company's film and television entertainment business achieved revenue of 1962.2873 million yuan, YOY 94.54%, revenue accounting for 92.47%, gross profit margin of 52.38%, and YOY8.66pct. 2) During the reporting period, “Predecessors 3: Goodbye,” and “Fanghua” grossed 1.64 billion and 220 million dollars, and the three films “Long Time No See You,” “King Bahobari 2,” and “Gardenia Blossoms” contributed 854.3653 million yuan in total revenue; “Nice to Meet You” and “Hi! Movies and TV variety shows such as “The Predecessor,” “Courier Man,” “Let's Run 2,” “Robot Battle 1,” and “Ace vs. Ace 3” were screened and broadcast on H1; a total of 25 theaters have opened, and 3 are under construction. 3) The company continued to strengthen content investment during the reporting period. “Di Renjie's Four Kings” and “Family of Thieves” (distribution and promotion) were screened in July and August, respectively, and are expected to contribute revenue in Q3; in addition, films produced by the company such as “Finding You”, “Children of the River and Lake”, and “Ghost Blowing Light - Bugs Valley in Yunnan” are expected to be screened within the year, with “Babai” and “Onmyoushi” as a reserve; participating in the investment of “Top Secret”, “July and Anson”, and “Meow Meow” TV dramas and online dramas such as “There Are Ghosts”. Brand licensing and the opening of Live Entertainment Q3, Internet Entertainment revenue adjustments. 1) During the reporting period, the company's brand licensing and live entertainment business achieved revenue of 14,18649 million yuan, YOY -28.40%; various projects progressed smoothly. Movie World (Suzhou) opened on 7.23, and movie towns in Changsha, Nanjing and Zhengzhou will also open one after another. 2) During the reporting period, the company's Internet entertainment business achieved revenue of 32.4755 million yuan, which was affected by changes in the scope of the merger of Yinhan Technology, YOY -88.12%. The investment proposal predicts that the company's 2018-2020 EPS will be 0.30/0.37/0.46, respectively, and the corresponding closing price of 5.67 yuan PE on August 24 will be 19/15/12, respectively, maintaining an increase in holdings rating. There is a risk of risk policy changes; the film's box office falls short of expectations.