The actual control of the company is Shenzhen SASAC. The equity of the company is relatively concentrated. Shenzhen Investment Holdings Co., Ltd., the largest shareholder, directly holds about 64.82% of the shares of the company, while the second largest shareholder directly holds only 0.08% of the shares of the company. The company's state-owned holding background and the characteristics of equity concentration have a positive impact on the sustainable operation of the company.

The company's real estate development business has been concentrated in Guangdong Province, resulting in the company's weak ability to resist regional risks. With the rapid rise of Vanke, Poly and other large real estate companies and the implementation of the auction-linked land transfer model, restricted by the company's development scale and financial strength, the company's ability to obtain land reserves has declined in recent years. In the past four years, only in July 2008 increased the land reserve of 30800 square meters (floor area). The company's expansion capacity has been hindered, and the real estate development business has gradually shrunk.

The company's operating income has continued to decline in the past two years, and the decrease in operating income has led to a decline in the company's ability to obtain cash. The net cash flow and the net increase of cash and cash equivalents generated by the company's operating activities for two consecutive years since 2007 are negative. In 2008, the cash flow per share of operating activities was-0.08 yuan, and the net cash flow per share was-0.12 yuan. The scarcity and non-replicability of land resources have intensified the competition among developers, and the signboard transfer policy of land use rights has promoted the rise of land prices. The gradual recovery of the real estate sales market in the first five months of 2009 will inevitably lead to the recovery of the land market, and the company's current shortage of funds has become a weakness for the company to obtain the sustainable development of land reserves, and the company's ability to obtain cash urgently needs to be improved.

On the premise of the gradual rebound of real estate sales in 2009, considering the proportion of the company's historical average costs in sales income in the past three years, we expect the company to earn 0.033 yuan per share in 2009, 0.042 yuan per share in 2010 and 0.029 yuan per share in 2011. The company's discounted RNAV per share is 1.94 yuan. Due to the lack of sufficient land reserves in the company a few years ago, the company's real estate business is gradually shrinking. The gradual recovery of the real estate market in 2009 is a double-edged sword for the company: on the one hand, the company can speed up the development and sales of existing projects and speed up the withdrawal of funds. But on the other hand, the warmer real estate sales market must have a positive impact on the land transfer market, and will also promote the competition and price of the land market to a certain extent. the company's existing financial strength has been unable to fully support the further expansion of the company's real estate business. Therefore, the company's financial position and profitability need to be improved, which will determine the company's ability to continue to operate. The company closed at 5.03 yuan on June 9, which is 2.6 times the company's RNAV, which partly reflects investors' expectations for the restructuring of the company. Considering the company's fundamentals and restructuring expectations, we give the company an overweight rating.