Events: The company released its 2018 semi-annual report, which achieved operating income of 304 million yuan during the reporting period, up 82.03% year on year; realized total profit of 59.66 million yuan, up 49% year on year; net profit attributable to shareholders of the parent company was 44.24 million yuan, up 14% year on year; net profit after deduction of 43.5 million yuan, up 28.34% year on year; basic earnings per share of 0.06 yuan. The second quarter achieved operating income of 154 million yuan in a single quarter, up 36.18% year on year; realized total profit of 44.16 million yuan; net profit attributable to shareholders of the parent company was 31.48 million yuan, down 6.43% year on year; net profit after deduction of 307.654 million yuan, up 6.72% year on year; and basic earnings per share of 0.04 yuan. Comment: 1) During the reporting period, the company's film and television project revenue increased by about 140 million yuan over the same period last year, resulting in an 82% year-on-year increase in revenue in the first half of the year. Corresponding to a 285% increase in operating costs in the first half of the year, gross margin decreased by 28.15 pct to 46.66% from the same period last year. During the reporting period, the films “True Colors of Heroes 2018", “Cats and Peach Blossom Garden”, “Escapist”, “I Am Not a Medicine Man”, and “The Heroic Stew of Food Adventures” were screened. The reality-themed film “I Am Not a Medicine Man”, which the company participated in investment, marketing, and distribution, became a hit movie this summer. The mature filming, production and promotion strategy allowed the film to have a double harvest in terms of box office and word of mouth. Up to now, the box office has exceeded 3 billion yuan, and has deservedly become a model for high-quality domestic films in recent years. In addition, the TV series “Above the Clouds”, “Martial Arts”, and the web drama “Bare Hands Covering the Sky” have already been broadcast, and TV dramas such as “Changhai Silk Road”, “If You Love Me Don't Think Too Much”, “Happy Hunter”, and “I Love You, This Is the Best Arrangement” will also be broadcast continuously within the planned time. 2) In terms of period expenses, financial expenses were reduced by 290% year-on-year due to higher net interest income. The sales expense rate/ management expense rate/ financial expense ratio for the first half of the year was 1.48%/28.26%/-2.08%, respectively, a decrease of 1.24pct/23.42pct/1.11pct from the same period last year. Investment suggestions: Since the transformation from the original main tourism business to the film and television culture business, the company has continuously participated in investing in many popular films. At the same time, it also has current development strategic goals in the TV series, artist brokerage, variety arts and travel culture sectors. It is optimistic that the company's ability to continue to produce high-quality movies and TV productions in the future, and will continue to build a “big entertainment industry model” around film, television, new media, and tourism. The company's 2018-2019 EPS is 0.50 yuan and 0.59 yuan, corresponding to PE, 20X and 17X respectively, maintaining “recommended” investment Level. Risk warning: Due to changes in the regulatory policy of the film and television industry, there is great uncertainty about movie box office revenue.