Incident: Huawen Media announced plans to cooperate strategically with Chinese TV drama production centers and sell some assets. Comment: The TV drama company plans to co-invest in the “Strategic Cooperation Framework Agreement” signed with the China TV Drama Production Center. Beijing China Television Film Media and Culture Co., Ltd., which is wholly owned by the company, is the main subject of cooperation with the Chinese TV drama production center. In principle, the total investment amount is not more than RMB 10 million, which is specifically for joint investment in TV drama filming, production and distribution with the Chinese TV drama production center. The China TV Drama Production Center is a unit belonging to CCTV that specializes in the creation and production of TV dramas. Through cooperation with the Chinese TV drama production center, the company will be able to quickly enter the TV drama industry, expand the company's media field, and share the investment benefits of quality TV series. The board of directors of the listed investment company will request the sale of the listed investment company's shareholders' meeting to authorize the company's management team to decide the timing and price of the disposal of all Jiangsu 365 Network Co., Ltd. shares held by Huashang Media within 12 months from the date of review and approval by the company's shareholders' meeting based on securities market conditions. Currently, Huashang Media holds 6,209,316 shares (11.64%) of 365 Network shares, with a carrying cost of 17 million yuan. Based on the closing price of 365 Network of 46.06 yuan/share on March 26, 2013, the market value of 365 Network held by the company is about 286 million yuan. If all are transferred at the current price, it is estimated that an investment return of 269 million yuan can be achieved. The investment of 365 Network is a successful example of the company in the field of investment. We expect that in the future, the company will gradually reap the benefits of equity investment in the future. The board of directors of the company withdrawing from the real estate business requested the company's shareholders' meeting to authorize the company's management team to decide to transfer no less than 60% of the shares of Hainan Minzhengliu Oil and Gas Storage and Transportation Co., Ltd. to unrelated parties through public listing. The reserve price for the listing transaction is based on the 100% equity interest of Hainan Minshengliu Oil and Gas Storage and Transportation Co., Ltd. not less than 550 million yuan. As of December 31, 2012, Changliu Company was attributable to the parent company's owners' equity of 373.58 million yuan, achieved operating income of 179.72 million yuan in 2012, and net profit attributable to the parent company's owners - 9.53 million yuan. According to the reserve price of 550 million yuan and the transfer ratio of 60%, the company will be able to obtain 330 million yuan in cash through the transfer, which is expected to achieve an investment return of about 106 million yuan. In addition, the company plans to transfer 100% of the shares of Hainan Yedeli Real Estate Development Co., Ltd., a wholly-owned subsidiary of Hainan New Coast Real Estate Co., Ltd., which holds 87.92% of the shares, to an unrelated party at a price of not less than 95 million yuan. These two asset sales mean that the company is gradually handling the real estate business and concentrating its future development efforts on the media industry. A large amount of cash was returned to prepare for investment in the media and new media sector. According to the 2012 annual report, the company had 1,044 billion yuan in cash on its books at the end of 2012, short-term loans of 529 million yuan, long-term loans of 69 million yuan, and the company's net cash (cash-loans) of 446 million yuan. If the sale of the three assets is completed, we expect to add about 711 million yuan in cash, and the company's cash will increase dramatically. After deducting the 100 million yuan to be invested in cooperation with the Chinese TV drama production center, there is still about 1.65 billion yuan in cash. The cash held by the company will provide sufficient financial resources for possible future further investment in media and new media-related fields. If more options for debt financing are adopted in the future (the balance ratio at the end of 2012 was 35.8%), there is still room to increase the amount of capital available for future investments. Internal resource integration and external acquisition cooperation to accelerate the company announced in January 2013 that it had acquired 100% of Guoguang Guangrong's shares and acquired the advertising business of China Radio International for three domestic broadcast frequencies. In February 2013, the company announced plans to purchase minority shareholders' rights in Huashang Media and its eight subsidiaries, as well as 100% of Chenghuai Technology's shares through a non-public offering of shares to specific targets. Through this acquisition, the listed company will integrate its media business and add additional study abroad consulting services. In the future, the company's business will cover media content and channels such as newspapers, magazines, radio, the Internet, study abroad consultations, outdoor advertisements, and TV dramas. According to the company's announced strategy, the company will actively build an all-media business structure and develop into a large-scale media group through internal resource integration and external mergers and acquisitions. We expect that in the future, the company will enter a stage of accelerated development. While completing the integration of various media resources at a relatively rapid pace, it may also enter rapidly growing new media fields such as Internet TV. Profit forecast and rating If we do not consider the impact of the acquisition of assets from the non-public offering and the one-time investment income from this sale of assets, we expect the company's main business EPS from 2013 to 2015 to be 0.29 yuan, 0.35 yuan, and 0.41 yuan, respectively. The price-earnings ratio corresponding to the current stock price is 27 times, 23 times, and 19 times, respectively. If we examine the impact of the non-public offering of shares after the acquisition of assets is completed, we expect that the company's EPS preparation for 2013 to 2015 will be 0.37 yuan, 0.44 yuan, and 0.51 yuan, respectively. The price-earnings ratio corresponding to the previous stock price will be 21 times, 18 times, and 16 times, respectively. The pace of transformation and development of the company is rapid and maintains a “Highly Recommended” rating. The risk indicates that the restructuring of major assets still needs to be reviewed and approved by the company's second board of directors, reviewed and approved by China Radio International, reviewed and approved by the company's shareholders' meeting, and approved by the China Securities Regulatory Commission before it can be implemented. Integration after external mergers and acquisitions.