State-owned enterprise reform in Shenzhen: Stay ahead of the times In October 2014, Shenzhen Investment Holdings Co., Ltd. formulated an overall plan for the reform of state-owned enterprises in Shenzhen, which should promote the concentration of superior resources in financial services, industrial real estate, and emerging industries, and develop a mixed ownership system. As a large enterprise directly under the Shenzhen State-owned Assets Administration Commission, Zhenye Group has strong expectations for reform. Real estate resources under Shenzhen's state-owned assets are in urgent need of integration. We have sorted out the situation of 18 large state-owned enterprises directly under the Shenzhen State-owned Assets Administration Commission, and found that resources in the real estate sector are extremely scattered, and there are strong integration expectations. We believe that it is possible to use listed housing enterprises directly under the Shenzhen State-owned Assets Administration Commission as an integration platform (Tianjian and Zhenye). Tianjian has set an example in employee ownership and introduction of war investment, so Zhenye may be responsible for carrying the banner of integration. Among them, the Shenzhen Metro Group has a large real estate scale (4 million square meters), and the introduction of promotion cooperation in the Henggang project may be seen as an entry point for integration. Zhenye Group: Development is accelerating. Revitalization can be expected. Zhenye Group's settlement resources this year have increased significantly compared to previous years, with advance payments of 1.45 billion (+122%) and completed products of 3 billion dollars, all of which hit new highs in recent years, laying the foundation for performance. The annual settlement revenue is expected to be 4-5 billion yuan, a doubling increase over the previous year. The regional layout dominated by the Pearl River Delta region makes it possible to maintain gross margin of 35%-40% above the industry average. The contract sales volume is expected to exceed 4.1 billion dollars this year, an increase of 28% over the previous year, and the repayment is very healthy. Land investment accelerated in 2013 and 2014 to secure future sales resources. It is estimated that the company's EPS in 2015 and 2016 will be 0.53 yuan and 0.70 yuan respectively, maintaining the “buy” rating. Currently, Zhenye Group's overall unsettled resources are about 3.4 million square meters, an overall RNAV of 9.623 billion yuan, and a premium of 134%. Compared with major housing enterprises, it is still relatively inexpensive compared to major housing enterprises. Combined with expectations of Shenzhen's state-owned enterprise reform (asset consolidation or incentive plans), there is room for further increase in market value. The risk suggests that there is uncertainty about the reform of state-owned enterprises. The real estate market fluctuated negatively.