I. Overview of events In the first half of 2017, the net profit range attributable to shareholders of listed companies was 76 million yuan to 88 million yuan, an increase of 86.63% to 116.10% over the same period last year. 2. Analysis and judgment that Mochicaka's profit was included in company reports from the beginning of the year. Junmeng Gaming's net profit increased more than expected in the first half of 2017. The main reasons for the increase in net profit attributable to shareholders of listed companies compared to the same period last year were: 1) the subsidiary Chengdu Mochikaka Technology Co., Ltd. was included in the company consolidated report from January 2017; 2) the subsidiary Shanghai Junmeng Network Technology Co., Ltd.'s net profit attributable to the parent company from January to June 2017 increased compared to the same period last year. Meanwhile, Shanghai Junmeng Network's 2017 performance promises to deduct non-net profit of 124.3 million yuan. Mochicaka's 16/17/18/19 performance promises to deduct non-net profit of no less than 63 million yuan, 79 million yuan, 99 million yuan, and 114.5 million yuan, respectively. The performance growth of the company's mergers and acquisitions of subsidiaries exceeded expectations, ensuring the company's future earnings. Junmeng Gaming has extensive IP reserves. Combining Mochicaka's big data analysis to discover various user companies have invested in the development and production of new mobile game products. Among them, Shanghai Junmeng mainly includes many overseas versions of “Ragnarok: Guarding Eternal Love”, “Ragnarok: Revival”, many overseas versions of “Ragnarok: Revival”, “SNH48,” etc.; Mochikaka, which mainly includes the well-known online IP “New Snow Eagle Lord”, the 20th anniversary classic movie and television IP “Return to Juge”, and Jin Yong authorized the original version of “Daredevil Over Three Songs” “With Little Dragon Girl”, Innovative Products” “Three Kingdoms: Heroes of the Three Kingdoms” etc. However, the operation, development and production of the above games will promote the achievement of the 2017 annual performance targets of Shanghai Junmeng and Mochikaka, and will also have a positive impact on the improvement of the company's overall business performance. Furthermore, Shanghai Junmeng is forming a larger R&D team to begin developing a new “Ragnarok MMORPG”, targeting the global market 1-2 years from now, and fully preparing for the performance in 2018 and beyond. With game development as the core, to achieve comprehensive operation and in-depth exploration of IP value. On the basis of integrating the resources of various business sectors, holding companies, and participating companies, the company set up a pan-entertainment division, laying the foundation for the company to integrate major cultural fields such as online games, animation, and online literature, and achieve industrial chain upgrading. In 2016, the company participated in Zhonglian Baiwen and Dongyang Liubai to further expand upstream in the industrial chain and complete strategic planning and deployment of high-quality content and copyright. In the future, it will open up the vertical industry chain of pan-entertainment, establish a video game linkage mechanism, and achieve comprehensive operation and in-depth exploration of IP value. 3. Profit Forecast and Investment Suggestions We believe that the company has high-quality game IP reserves and a comprehensive pan-entertainment industry layout. The company's net profit for 17/18/19 is predicted to be 370 million yuan, 420 million yuan, and 480 million yuan respectively. The company's 2017-2019 EPS is expected to be 0.97 yuan, 1.12 yuan and 1.28 yuan respectively. The PE corresponding to the current stock price is 20X, 18X, and 15X, respectively, and the initial rating is “prudent recommendation”. 4. Risk warning: 1. Macroeconomic downturn; 2. Business development falls short of expectations.