The company's consolidated statement for the first half of 2010 shows that it achieved operating income of 7.7704 million yuan, a year-on-year decrease of 91.24%; net profit attributable to shareholders of the parent company was 9.01 million yuan, a year-on-year decrease of 206%. Basic earnings per share - $0.048.

There were few items that could be settled in the first half of the year, which led to a sharp decline in operating income and net profit over the same period last year. During the period, real estate business revenue was 7.42 million yuan, and rental income was 350,000 yuan. The settlement was mainly at the end of the first phase of the Anshan Smart City Project, where gross profit was low, and parking spaces. The gross margin fell 26.8 percentage points from the previous year.

If it goes well, the Dujiangyan Lishui Impression Project will be the main source of performance in 2010. Construction of the Dujiangyan project has begun in full. Currently, the building has been capped, with a view to completion and acceptance before the end of the year. Accounts received in advance at the end of the first half of the year were 146 million yuan, an increase of 1.95 times over the beginning of the period. It is estimated that they will mainly pre-receive housing payments for the Dujiangyan project, locking in 92% of our revenue forecast for 2010.

Equity investment: Holds 810,000 shares of the unlisted financial company Shenyin Wanguo, with an initial investment cost of 1.24 yuan/share; Baoding invests 28,000 shares, with an initial investment cost of 1 yuan/share. This portion of equity has a certain value-added income.

Poor performance sustainability: Currently, the main projects are Lishui Impression, the Dujiangyan Project, and the second and third phases of the Smart New City in Anshan, Liaoning. The construction area is about 160,000 square meters, and the total project reserves are limited. However, the size of the company is small, with total assets of only 760 million yuan and inventory of 563 million yuan. Inventory accounts for 74% of total assets. Project reserves are reasonable compared to the size of the company, but there is no guarantee that performance will continue to grow.

Financial strength is limited: the rapid turnover ratio at the end of the period is 0.59 times, the monetary capital is only 68.88 million yuan, and there is no capital strength to supplement effective project reserves.

There are few highlights; the biggest expectation is still asset restructuring. According to the company's current comprehensive strength, capital strength is limited, project development capabilities are poor, and the possibility of achieving breakthrough development is small. Asset restructuring remains the most interesting topic.

Maintain a neutral rating. We expect the company's EPS for 2010-2012 to be 0.02 yuan, 0.07 yuan, and 0.13 yuan respectively. According to yesterday's closing price of 8.92 yuan, the corresponding price-earnings ratio is 514 times, 125 times, and 67 times, respectively. Maintain a neutral investment rating.