There were few revenue confirmations for the first quarter of 2010. The company released its 2010 quarterly report today: operating income was 13.74 million yuan, down 66.7% year on year; net profit attributable to parent company was 1.93 million yuan, up 8.0% year on year; total share capital of 106.131 million shares, net assets of 1.56 yuan per share. A comprehensive developer based in Ningbo with locations in Changshu and Hangzhou. The company completed asset restructuring in May 2009 and became a comprehensive developer based in Ningbo with a layout in the Yangtze River Delta. Its products include residential and office buildings. The company currently has a planned construction area of about 1.2 million square meters for projects under construction and proposed construction, mainly distributed in Ningbo, Changshu and Hangzhou. There were no carry-over items sold during the reporting period. The main projects that the company participated in settlement in 2010 were “Rongan Garden” and “Rongan Qin Bay”. Among them, Rongan Garden is expected to begin delivery in June 2010, and Rongan Qin Bay will be delivered at the end of 2010. The company had few carry-over resources in the first quarter (mainly some late trading), which is the main reason for the decline in revenue. The reduction in revenue and profit was mainly due to a sharp increase in gross margin. The company's gross margin for the first quarter was 66%, a sharp increase of 48 percentage points over the previous year, mainly due to the increase in sales prices at the end of the session. Sales continued to be popular in the first quarter, and there is high certainty about 2010 results. The company's sales projects in the first quarter of 2010 were mainly Rong'an Garden, Rong'an Qin Bay, and Central Garden Phase I. As of the end of March, the balance of advance payments reached 1.29 billion yuan, an increase of 430 million yuan over the beginning of the year. Among them, Rongan Garden has basically sold out, Rongan Qinwan has sold about 50%, and the company's performance in 2010 is highly certain. The financial situation is relatively healthy. As of the end of March 2010, the company's balance ratio was 70.6%, and the real balance ratio after excluding advance payments was 47.7%, which was at a moderate level in the industry, and the long-term financial structure was quite reasonable; the real fluctuation ratio was 2.2. The book cash was 450 million yuan, an increase of 290 million yuan over the beginning of the year, mainly due to investment recovery and loan acquisition, and short-term debt repayment pressure was less; among them, operating cash flow was -240 million yuan. Although sales of commercial housing led to cash inflows of 440 million yuan, the company's final cash flow was 4.4 billion yuan. It's still negative. Major shareholders provide financial support: Rongan Group, the majority shareholder of the company, will grant the company a short-term loan amount of 3 billion yuan over the next year, which will further enhance the company's financial strength. There is no heavy warehouse structure, and the circulation market is small. The company's quarterly report shows that there are no institutional investors among the top ten tradable shareholders. The company has a total share capital of 1.16 billion shares and a tradable share capital of 120 million shares, but there is little pressure to lift the ban in the short to medium term (majority shareholders will not reduce their holdings for five years from November 2009, and two shareholders will not reduce their holdings for three years) 2010 interim results will still be limited by few carry-over resources. At the same time as publishing a quarterly report, the company released the 2010 interim results forecast: The net profit attributable to the parent company in the middle of 2010 is expected to be between 70 and 85 million yuan, a year-on-year decrease of about 80%, equivalent to earnings per share of about 0.07 yuan. The main reason for the decline in the company's interim results is still that the sold projects have not been carried over: Rong'an Garden, the company's main project that participated in settlement in 2010, will begin delivery in June 2010, and Rongan Qinwan will begin delivery at the end of 2010. The biggest highlight is the ability to operate the project. Thanks to strong project operation capabilities, the company's real estate development business has strong profitability. The gross margin for settlement in 2009 reached 61.4%. We expect it to remain above 60% in 2010-2011, which is at a high level in the industry. Earnings forecasts and investment ratings. We expect the company's earnings per share for 2010-2011 to be 0.62 yuan and 0.75 yuan respectively. Based on the latest closing price of 9.49 yuan, the corresponding dynamic price-earnings ratios are 15 times and 13 times, respectively. The valuations are reasonable. Considering the company's good project layout, clear expansion path, and strong project operation capabilities, we maintain the company's “increase in holdings” rating.