Incident: Recently, we investigated the status of Jingneng Real Estate Company and some projects, and exchanged views with relevant company personnel. Key points: Significant resource-based characteristics: As the controlling shareholder of the company, Beijing Energy Investment (Group) Co., Ltd. holds 45.26% of the company's shares, and is also a wholly-owned holding company under the Beijing Municipal State-owned Assets Administration Commission. The company's resource type is reflected in two points. One is shareholder resources, and the other is scarce project resources. Over a long period of time, the company has greatly guaranteed financing and cash flow management issues through financial service framework agreements signed with controlling shareholders, and the company's financial rate control level is excellent; secondly, as a company under the State Assets Administration Commission, the company has obvious advantages in obtaining scarce project resources, such as projects such as the Sihe Senate and the Tianchuang Science and Technology Building. Gradual optimization of land reserves: The company has always emphasized maintaining a steady or slightly growing ROE level (which reached a high of 19% in 2011), so it is relatively cautious in expanding projects. In March 2012, the company acquired 400 mu of land in Lushun, Dalian, and began to expand commercial projects in Lianyungang and tourist real estate projects in Yuntai Mountain in Jiaozuo through equity cooperation. The company's equity land resources began to grow dramatically. Performance may be drastically released: Sihe Shangyuan, located at the northeast corner of Caishikou in Xicheng District of Beijing, is the main real estate contributing to sales and performance. Currently, what has not been sold is the residential portion of Phase 3 (Building 4 and Building 5) and some supporting businesses for buildings 1, 2, and 4. The project is currently undergoing construction of an outdoor ancillary project. We estimate that the residential part (buildings 4 and 5 totaling 61,300 square meters) will sell existing housing in the third quarter. Considering surrounding housing prices and project scarcity factors, we conservatively estimate that the settlement price of the project will be 52,000 and the net profit margin is 25%. The residential portion of this project alone will contribute 1.1 yuan to the company's performance. Highly recommended rating: The company's carry-over revenue and offsite sales have increased dramatically since 2010, and is subject to the layout of settlement programs. Although performance has fluctuated, the degree of guarantee is not low. We are optimistic about the company's performance this year. In addition, tourism and commercial projects involving equity cooperation in other places are also worth looking forward to. The company's net profit for 2013-2015 is estimated to be 654 million yuan, 498 million yuan, and 485 million yuan respectively, and the corresponding EPS is 1.44 yuan, 1.10 yuan, and 1.07 yuan respectively. According to the 8-fold PE valuation, the company's current stock price is significantly underestimated, and for the first time, it has been given a strong recommendation rating. Risk warning: Sales progress is falling short of expectations.