Key investment matters: The company announced its 2014 annual report, achieving operating income of 4.85 billion yuan, up 8.28% year on year, net profit attributable to shareholders of listed companies of 770 million yuan, up 9.06% year on year, EPS of 0.50 yuan, BPS of 5.11 yuan, and performance slightly lower than expected. It is planned to distribute 1 yuan (tax included) for every 10 shares. Ping An's view: Performance fell short of expectations due to the slowdown in the growth rate of real estate settlement area: the company's revenue for the full year of 2014 increased by 8.28%, slightly lower than market expectations. Among them, real estate settlement revenue was 4,217 billion yuan, an increase of only 4.3% over the same period last year, resulting in slightly lower performance than expected. Due to market adjustments, the gross profit margin of the company's real estate business was 35.39%, down 1.53 percentage points from 2014, but benefiting from a decrease in the share of minority shareholders' equity, net profit attributable to owners of the parent company rose 9.06% year on year, slightly higher than the growth rate of operating income. Efforts to remove inventories were strengthened, and sales increased against the market: In 2014, the company stepped up promotion and promotion efforts, and sales expenses increased by 44.58% year on year, in an effort to speed up the pace of sales. The annual sales area was 6691,000 square meters, and the sales amount was 6.604 billion yuan, up 9% and 28.5% respectively from the previous year, achieving adverse market growth. However, due to market adjustment pressure, sales fell slightly below the annual target of 7 billion yuan. The removal rate of saleable area throughout the year is only 35%, which is lower than the level of 60% of industry leaders, indicating that there is still plenty of room for improvement in the company's internal marketing management. The company's sales target for 2015 was 8 billion yuan, up 20.4% year on year. The company's completed area in 2014 increased 80% year on year, and settlement increased by only 4%. Therefore, the large inventory of completed and unsold existing housing is a resource that the company will focus on eliminating in 2015. Relying on the resources of the Cinda department, a breakthrough was achieved in project expansion and urban layout: with the overall listing of Cinda in China, the internal synergy between the company and the ICT department became more prominent, and access to project reserves through multiple channels laid the foundation for the company's continued development. During the reporting period, 3,044,800 square meters of additional land reserves were added to the construction area, reaching the highest level in history after the company's restructuring and listing. Of the new reserves, the Yangtze River Delta, the central region, and the Pearl River Delta account for 20.23%, 29.54%, and 41.35% respectively. By opening up internal financing channels, financial leverage has improved: as the company increased its land reserves, the balance ratio after excluding advance payments at the end of the reporting period rose to 75.4%, a sharp increase of 10.7 percentage points from the end of the previous year. Cash on hand covered only 37% of long-term and short-term liabilities due within one year. When the real estate industry entered the adjustment period, the company relied on internal collaboration to increase land reserves and increase financial leverage. As can be seen from financing channels, the Cinda Department has achieved internal financing support for the company. At the end of 2014, the company's total balance of various types of financing was 2015.1 billion yuan, of which bank loans were 7.093 billion yuan, trust financing was 7.317 billion yuan, funds and other financing were 5.741 billion yuan. The weighted average financing cost was 9.1%, slightly lower than the financing costs of small and medium-sized real estate companies of about 11%-13%. Profit forecast and investment advice: We expect that the accelerated removal of the company's existing housing resources and the gradual reflection of the synergy of the ICT system will provide sufficient settlement resources in 2015, but gross margin will still decline. The company's 2015-2016 revenue is expected to be 5.45 billion yuan and 6.28 billion yuan, EPS is 0.59 and 0.70 yuan respectively, and corresponding PE is 14.1 and 11.9 times, respectively, maintaining the “recommended” rating. Risk warning: Internal collaboration is progressing slower than expected. The company's sales fell short of expectations.