Events:

The company publishes its semi-annual report for 2014. During the reporting period, the company realized operating income of 1.116 billion yuan, an increase of 47.66% over the same period last year; the net profit belonging to shareholders of listed companies was 62.55 million yuan, down 21.62% from the same period last year; and realized basic earnings per share of 0.06 yuan.

Investment advice:

The company's real estate business is all concentrated in Tianjin, covering commercial housing, indemnificatory apartment and first-class land development business. Since last year, the company began to increase the reserve of indemnificatory apartment project (involving the construction of 1.2 million square meters on behalf of indemnificatory apartment). At present, the total construction area of the company's rights and interests is 4.37 million square meters (not considering the Hangu Hexi land consolidation project of 1700 mu), which can meet the development of the company in the next three years. In the context of real estate regulation, the company is cautious so that its debt and cash flow are good, while the advance income per share is higher. We estimate that the company's EPS in 2014 and 2015 will be 0.14 yuan and 0.22 yuan respectively, and the corresponding RNAV will be 6.69 yuan. As of Aug. 27, the company closed at 3.57 yuan, compared with 25.11 times PE in 2014 and 16.38 times PE in 2015. Give the company 65% of RNAV as its target price, corresponding to the target price of 4.35 yuan, to maintain the company's "overweight" rating.