The 1H20 performance was higher than our expectations. The company announced 1H20 results: revenue of 5.00 billion yuan, up 3.4% year on year; excluding the influence of Oriental Cable, down 20.0% year on year; net profit of 1.03 billion yuan, down 6.4% year on year; net profit after deducting non-return net profit of 750 million yuan, up 3.6% year on year, higher than our expectations, mainly due to sales and higher than expected investment returns achieved by the Yangpu Binjiang Project. The development trend is that the Yangpu riverside project has achieved sales. The cultural tourism sector was actually still greatly affected during the pandemic. Affected by the epidemic, places such as the Oriental Pearl TV Tower, World Expo Cultural Center, and cinemas were closed for a long time in the first half of 2020, and supply and demand for video shopping, advertising and other businesses were also blocked. 1H20, video shopping business revenue fell 58.6% year on year to 1,205 million yuan, and gross margin increased 17.8ppt year on year due to the implementation of the new revenue standards; considering the merger of Oriental Cable, media network business revenue increased 73.6% year on year to 2,485 billion yuan. Excluding the impact of the merger, media network revenue fell 18.9% year on year; film and television mutual entertainment business revenue fell 21.2% year on year to 296 million yuan; cultural tourism consumption business revenue increased 105.3% year on year to 1,882 billion yuan, mainly due to the Yangpu riverside project, which achieved sales growth, if this was excluded Influenced by factors, the cultural tourism consumer business declined significantly year-on-year due to the impact of the epidemic. The company's 1H20 gross margin increased 7.0ppt to 32.4% year on year. OPG Cloud continues to improve its operational capabilities and promote the creation of an integrated media platform. 1H20, the company's BestV integrated channel platform serves 58.23 million IPTV business users and 45.66 million OTT business users; in terms of cable TV channels, premium and standard definition channels cover 200 million digital TV users nationwide, including 56 million active pay-TV users; 18 million interactive on-demand cooperative platform users; on the mobile side, the number of monthly activity reaches 81 million. After the acquisition of Oriental Cable in 2019 to achieve control, the company's active exploration of channel and content integration in the cable television industry is also progressing steadily. The OCN & SITV integration platform was officially launched on December 15, 2019. We believe that the number of users and channel advantages may help the company build an omni-channel integrated media platform, which is expected to further unlock profits in the future. Pay attention to the progress of “State Grid integration”. In March 2020, the “State Grid Integration” implementation plan was introduced. China Radio and Television took the lead in forming the “National One Network” joint stock company. The company plans to participate in this launch with cash funding. In particular, it will make adjustments to 700M high-frequency related business, including the replacement of launch facilities and equipment related to the Oriental Pearl Tower, laying the foundation for subsequent business transformation and upgrading. We believe that “State Grid integration” is about to enter a stage of substantial progress. It is expected to break down geographical barriers and achieve resource integration and scale effects, thereby accelerating the transformation and upgrading of cable networks, enhancing the carrying capacity and content support capacity of private cable networks, and further accelerating the construction of 5G radio and television and related applications. It is recommended to keep an eye on relevant developments. Profit forecast and valuation We kept our 2021 net profit of 1,585 million yuan unchanged. Considering the sales of the Yangpu riverside project and the achievement of higher than expected investment income, the 2020 net profit forecast was raised by 19.6% to 1,583 billion yuan. The current stock price corresponds to 22.0 times the 2020 price-earnings ratio and 18.8 times the 2021 price-earnings ratio. Maintaining a neutral rating, based on the steady progress of the company's business recovery, we raised our target price by 18.3% to 10.88 yuan, corresponding to 20 times the 2021 price-earnings ratio, which is 6.5% higher than the current stock price. Risk The impact of the pandemic has exceeded expectations; competition has intensified; macroeconomic fluctuations affect entertainment consumption demand