The three prime real estate projects have huge profit margins: this is mainly due to the company's relatively low land costs and rising housing prices. The Pearl River New Town project is located in Zhujiang New Town, Guangzhou, with a total construction area of 88,500 square meters, and we expect gross profit per square meter to exceed 20,000 yuan; the Pearl River Xin'an apartment project is bordering the Pearl River, with a total construction area of 56,300 square meters. We expect a gross profit of 7,500 yuan per square meter; the Pearl River Flower City project in Changsha is huge, with a land cost of only 400,000/mu, and the land cost of the nearby Xinhe Delta plot has reached 7.81 million per mu. The three major gold real estate projects can be developed until 2014. We are conservative in predicting the company's performance until 2011, that is, the company's performance for the next 45 years is very guaranteed.

.. We predict that the company's performance will explode after 2008, and our performance forecast is still very conservative.

According to the project settlement progress, we predict that the company's EPS from 2007 to 2010 will be at least 0.11 yuan, 1.39 yuan, 1.43 yuan, and 2.70 yuan (land value-added tax has been taken into account). The reason we think this forecast is conservative is that we only forecast current prices (or property prices in surrounding areas) and have not considered the possibility that the property prices of these three major gold projects will continue to rise; second, we have not considered other projects that Pearl River Industrial will develop in the future.

We are also very conservative in positioning the company just 20 to 25 times PE in 2008. Although Pearl River Industrial's performance can certainly be seen very clearly and is very far away, we are still considering discounting it from the valuation level of leading real estate companies such as Vanke. We gave the company's stock a PE valuation of 20 to 25 times in 2008.

For the first time, we have given a “Highly Recommended - A” investment rating. Our conservative profit forecast plus a conservative valuation position resulted in a target of 27.8-34.7 yuan. There is still nearly double the market space. It should be said that we have left a margin of safety for our investors.