Events:

2011 report: in 2011, the company achieved operating income of 5.692 billion yuan, an increase of 32.54% over the same period last year; operating profit of 354.15 million yuan, an increase of 224.35% over the same period last year; and a net profit of 295.14 million yuan belonging to the owner of the parent company, an increase of 179.65% over the same period last year.

Comments:

Yantai Wanrun listed, the company achieved high investment income. Due to the listing and issuance of Yantai Wanrun, the company recognized a total investment income of 167.164 million yuan according to the current shareholding ratio of 19.93%, an increase of 530.15% over the previous year. In 2011, Yantai Wanrun achieved a net profit of 120 million yuan, a year-on-year increase of more than 20% of the real estate business is the main source of profit growth. The Jinan Lubang Galaxy Building of Lupang Real Estate, a subsidiary of the company, was sold at a price of 660 million, with an operating profit of 172 million. The project has become the main source of profits for the company in 2011. Another of the company's real estate projects, Lubon style Street, is expected to open in August 2011 and will contribute to the company's performance in 2012.

The company's participation in the field of financial and cultural works of art is expected to open up new horizons. The company contributed RMB 30 million yuan with monetary funds, as the main sponsor, accounting for 30% of the registered capital of Luyin small loan company, and is the largest shareholder of Luyin small loan company. The company invests RMB 150 million with fixed assets and monetary funds (of which Luyin Mansion is valued at 91.0384 million yuan and monetary capital is 58.9616 million yuan) to set up a wholly-owned subsidiary Shandong Luyin Cultural Art Co., Ltd.

Profit forecast and investment advice: the company's EPS in 2011, 2012 and 2013 is 1.19,1.02 and 1.05 yuan respectively. According to the 2012 EPS and the price-to-earnings ratio of various industries, the reasonable share price of the company is 15.75 yuan, which is rated as "overweight".