Incident: In 2012, the company achieved operating income of 767.1661 million yuan, operating profit of 91.698 million yuan, net profit attributable to shareholders of listed companies of 74.254 million yuan, a year-on-year decrease of 47.36%; equity attributable to owners of listed companies was 143.5374 million yuan, a year-on-year decrease of 4.35%; and net assets per share attributable to listed shareholders were 1.98 yuan, a year-on-year decrease of 4.35%. Comment: Positive factor: The management model is gradually improving. During the reporting period, the company re-planned the establishment of group functional departments, improved the operation management system, gradually improved the “big technology and marketing, small engineering management” model, strengthened the role of technology center and marketing center, introduced a KPI performance assessment system, promoted a regional authorization management model, and achieved good management results. Land reserves have been increased. During the reporting period, the company transferred 49.9% of the shares of Qingyuan Wuzhou Industrial Investment Co., Ltd. held by Anxin Trust for 233 million yuan, increasing the company's equity and land reserves; using a model combining equity concessions and loans from Wuhan Wolong Moshui Lake Real Estate Co., Ltd., it introduced real estate private equity funds, expanded the company's financing channels, optimized the company's asset structure, and promoted the company's project development. At the end of the reporting period, the company had a land reserve with a construction area of about 2,5097 million square meters. Innovation creates value. During the reporting period, the company grasped marketing strategies based on the market situation. By segmenting customer types, thoroughly researching customer characteristics, innovating marketing channels, boldly using new cooperation channels such as e-commerce, and entering the market in due course, the real estate sales performance of Wuhan regional companies led the Wuhan Jinyin Lake area, and also ranked among the top in the whole of Greater Wuhan. Furthermore, the well-decorated real estate in the Shaoxing area also achieved good sales performance this year through a sales model combining self-sales and agency sales. The company successfully won honors such as “2012 Zhejiang Top 20 Real Estate Brands”. Company outlook: Close to the market and brave in innovation. The company will profoundly study policies and industry trends, strengthen the sense of cooperation with a more pragmatic attitude, actively seek government cooperation projects with lower land costs based on second-tier and third-tier cities with urbanization rates between 40% and 50%; strengthen design cost reduction capabilities around the requirements of “low cost, high speed, and good quality”; reduce product development costs through technology optimization and application of new materials; study various types of products to create a replicable series of products to increase the speed of project development; strengthen basic research and technological innovation to develop innovative apartments and innovative products that meet market needs; Develop high-end residences based on immediate needs; continue to improve the management model of “big design and marketing, small in the middle of project management” and innovate marketing methods; build a management team with a high level of management, strong professional skills, and quick market response to ensure fast project turnover and good economic benefits. Investment suggestions: We believe that the company currently lays out third-tier cities in the east and provincial capitals with developed economies in the central and western regions, and has great potential for development in the layout area. In the future, as economic growth and social investment in the central and western regions increase, demand for real estate will continue to be strong, and the company is expected to reap a lot in the later stages; in the future, the company will gradually increase the proportion of hardcover houses and commercial real estate, diversify the business structure, effectively distribute operating risks, and enhance brand competitiveness; the company will continue to deepen management improvement, follow the path of fine management, strictly control costs, and improve project operation efficiency. Furthermore, with the steady development of the Wolong Group as a whole, Wolong Real Estate, as one of the Group's top three businesses, is expected to enjoy the synergy brought about by the interaction between the Group's industries. We expect the company's sales revenue from 2013 to 2015 to reach 1,394 billion yuan, 1,765 billion yuan and 2.62 billion yuan respectively, with earnings per share of 0.26 yuan, 0.33 yuan and 0.54 yuan, respectively. The corresponding PE is 13.15, 10.47 and 6.35 yuan, respectively. Maintain the company's “Recommended” rating.