Incident: Recently, we conducted field research on Yunnan City Investment and exchanged views with group and listed company executives on business operations and development strategies. Abstract: 1. Hardware upgrade - developing “healthy” tourist real estate based on “Yunnan+Greater Mekong”. Tourism projects based on “healthy real estate” are the company's core competitive products. They not only make full use of Yunnan's tourism resources, but are also actively researching and arranging the “Greater Mekong” tourism project in the context of the Belt and Road national strategy. Yunnan has obvious regional advantages, abundant project reserves, and strong synergy with the group's resources. Relying on the characteristic “Belt and Road” of Yunnan, the company is actively researching and arranging the “Greater Mekong” tourist real estate project, which is expected to benefit from huge local demand and further boost from the AIIB. 2. Software upgrade - Actively embrace the Internet and create a “timeshare vacation platform”, which is extremely scarce in A-shares. In the future, the company will actively embrace the Internet, rely on the Group's resource advantages such as big health, big leisure, financial and payment licenses, etc., to create a “timeshare vacation platform” based on Dream Yunnan to explore transaction links such as secondary sales and rental services; and community O2O based on property management. The main content of the “timeshare vacation platform” includes the three levels of further cutting of the time dimension, exchange of vacation spaces, and standardization. It is a powerful tool for optimizing stock resources. Relying on the offline travel resources of companies and groups, it has the foundation for increasing the number of users. There are mature cases of “timeshare platforms” abroad (market capitalization has reached 10 billion US dollars), and they are extremely scarce in A-shares. 3. Among the important beneficiaries of state-owned enterprise reform, resource integration and incentive optimization are the main highlights, and the financing platform function will receive more attention. The reform schedule for Yunnan state-owned enterprises has been further refined. As the only platform for listing A-shares in urban investment in the province, the company is expected to benefit from resource integration and incentive optimization in the future. Considering the increasing vitality of the A-share market in the future, the Group should place more importance on the company's financing platform function; furthermore, the company's balance ratio is high (80% +), so reducing leverage through equity fund-raising is also an objective requirement. 4. Profit forecast and investment rating. Without considering additional issuance, the company's earnings per share for 2015-2017 are expected to be 0.65, 0.80, and 0.98 yuan respectively (up 22%, 23%, and 23%, respectively over the previous year). The current stock price corresponding to 15PE is 20X, which is at a low level among regional real estate companies. The company currently has a total market value of 10 billion dollars, which only reflects its value as a “traditional regional real estate stock,” but there are no full expectations for the company's strategic emerging industries (tourist real estate+timeshare platform). The Greater Mekong project, timeshare, community O2O, and state-owned enterprise reform can provide a continuing catalyst. For the first time, we covered the company and gave it an investment rating of “Highly Recommended - A”. The target price for the first stage can be given 30X 15PE, and the corresponding price center is 19.5 yuan. With the gradual implementation of catalysts, future market capitalization is expected to impact higher targets. 5. Risk warning. 1. The balance ratio is high; 2. Settlement progress and gross margin of major projects are lower than expected; 3. Progress in the layout of new economies such as timeshare vacation platforms is lower than expected; 4. Progress in state-owned enterprise reform is lower than expected.