Incident: The company released its 2013/1 quarterly report. During the reporting period, the company achieved operating income of 306 million yuan, a year-on-year decrease of 46%; realized net profit attributable to shareholders of listed companies of 66.32 million yuan, an increase of 10.79% over the same period last year; and achieved basic earnings of 0.06 yuan per share. Investment advice: The company's real estate business is all concentrated in Tianjin, covering commercial housing, guaranteed housing, and first-class land development business. Since last year, the company has increased reserves for guaranteed housing projects (involving 1.2 million square meters of subcontracted housing). Currently, the company's equity construction area totals 4.37 million square meters (not taking into account the 1,700-acre Hangu Hexi land reclamation project), which can meet the company's development for the next three years. In the context of real estate regulation, the company maintained a cautious mentality so that its debt and cash flow were good, and advance payments per share were high. We estimate that the company's 2013 and 2014 EPS will be 0.18 yuan and 0.22 yuan, respectively, and the corresponding RNAV will be 6.89 yuan. As of April 26, the company closed at 3.19 yuan, corresponding to 18.16 times PE in 2013 and 14.44 times PE in 2014. The company was given 55% of RNAV as its target price, corresponding to the target price of 3.79 yuan, maintaining the company's “gain” rating. Main analysis: In the first quarter of 2013, the company's commercial housing settlement revenue decreased by 45%, while the Hangu land reclamation project received government subsidies, resulting in a year-on-year increase of 11%: in the first quarter of 2013, the company achieved operating income of 306 million yuan, a year-on-year decrease of 46%; due to the receipt of government subsidies for the Hangu land reclamation project, the company achieved net profit of 66.32 million yuan during the reporting period, an increase of 10.79% over the same period last year. In 2013, the company plans to achieve revenue of 1,611 billion yuan: affected by regulatory policies such as purchase restrictions in the Tianjin market, the company completed sales area of 153,200 square meters in 2012 (a decrease of 31.1% year on year) and sales of 1,475 billion yuan (decrease of 34.8% year on year). This will have a certain impact on the company's performance growth this year. According to the company's annual report, in 2013, the company plans to build an area of 2.6594 million square meters, achieving a main business revenue of 1,611 billion yuan. In 2013, the company plans to spend a total of 5.204 billion yuan, including 1,135 billion yuan for land development, 1,628 billion yuan for projects, 1,615 billion yuan for loan repayment, and 826 million yuan for other expenses. Investment advice: Under regulation, the company's debt situation is good, and the “increase in holdings” rating is maintained. The company's real estate business is all concentrated in Tianjin, covering commercial housing, guaranteed housing, and first-class land development business. Since last year, the company has increased its reserves for guaranteed housing projects (involving 1.2 million square meters of contracted housing). Currently, the company's total equity construction area is 4.37 million square meters (not taking into account the 1,700-acre Hangu Hexi land reclamation project), which can meet the company's development for the next three years. In the context of real estate regulation, the company maintained a cautious mentality so that its debt and cash flow were good, and advance payments per share were high. We estimate that the company's 2013 and 2014 EPS will be 0.18 yuan and 0.22 yuan, respectively, and the corresponding RNAV will be 6.89 yuan. As of April 26, the company closed at 3.19 yuan, corresponding to 18.16 times PE in 2013 and 14.44 times PE in 2014. The company was given 55% of RNAV as its target price, corresponding to the target price of 3.79 yuan, maintaining the company's “gain” rating. Risk warning: The industry faces two major risks: interest rate hikes and policy regulation.