Company News Recently, the company released a performance forecast for the first half of 2013: net profit attributable to shareholders of listed companies was 10 million yuan to 110 million yuan, an increase of 297 times - 326 times over the same period last year. Key Opinions The sharp increase in the performance of the company's positioning as an integrated urban operator benefited from the company's increased marketing in the first half of 2013 to achieve land sales revenue, plus the small base for the same period last year. After the company's restructuring was completed, Tieling Financial Asset Management Co., Ltd. and Tieling Finance Bureau became the controlling shareholders and actual controllers of the company. The company is positioned as a comprehensive urban operator, including early planning, demolition, first-level land preparation, investment promotion, and later operations; Tieling New Town is 8 kilometers from Tieling's old town, 30 kilometers from Shenyang city, and the Beijing-Harbin Line, Hada Expressway, and G102 National Highway; Tieling West Station of the Hada High Speed Rail is located in Tieling New Town. It only takes two hours from Beijing to Tieling after the opening of the high-speed rail in 2015! Tieling New Town has brought in well-known domestic and foreign real estate developers, such as Malaysia's Tianli Group and China Construction. Tieling New Town shares telephone area codes with Shenyang City; since 2010, Tieling City has accelerated the construction of the Shentie Industrial Corridor: using National Highway 102 as the axis, from Shenyang in the south to Jilin Province in the north, and across the entire territory of Tieling City, the plan covers 7 counties (cities) districts and 37 townships (town) streets in two economic development zones, with a total area of 3,313 square kilometers and a population of 1.47 million people, including 10 major industrial clusters in 18 key industrial parks in Tieling. Rural urbanization plans unleash the potential of first-level land development. Liaoning Province is trying to cultivate first-level land developers. Listed companies have always attracted the attention of local and provincial governments as important financial platforms for local governments. Tieling New Town has a planned area of 22 square kilometers, and its water area accounts for 30% of the city area. It is known as a northern water city and a national garden city, and was once the only Chinese city exhibited at the Shanghai World Expo. It is conservatively estimated that 45% of the planned construction area can form a marketable area. Furthermore, as new counties and towns steadily advance urbanization (new city construction cycle is about three years), there is still plenty of room for growth in the area of first-level company land development in the future. We expect the potential concession area to exceed 100,000 mu. Currently, the average land concession price in Tieling has risen from 600,000/mu in 2011 to 1,000,000/mu. In 2013, the company will promote first-level land development south of the Van River and expand new first-level development projects. We expect the company to prepare about 2,000 mu of land for listing in 2013, and we expect land concession revenue of 2 billion dollars. In the future, companies may also adopt horizontal replication within the province and cross-regional offsite replication. Performance promises According to the performance promises of the restructuring party Tieling Caijing, the net profit achieved in 2012 and 2013 was not less than 678 million yuan (actual 681 million yuan) and 739 million yuan. Equivalent to about $1.23 and $.34 EPS. If the performance does not meet the standards, the majority shareholders will buy back at a price of 10.13 yuan. Fixed-increase institutional placement of shares may face some pressure to reduce holdings in 2013, so we still need to pay attention to subsequent progress. The investment proposal is to give a “neutral” rating to the most important first-level land developers in the province within the next six months, receiving strong support from local governments. The gross margin of the company's first-level development is high, benefiting from rural urbanization and the construction of the Shentie Industrial Corridor, driving a relatively rapid rise in land prices. Land concessions are expected to reach new highs this year, and may increase horizontal replication and cross-regional development efforts within the province in the future. The company's net profit for 2013-14 is estimated to be 770 million yuan/840 million yuan, equivalent to EPS of about 1.40 yuan/1.53 yuan, corresponding to dynamic PE of about 7X/6X, and it is recommended to give the company a “neutral” rating. Risk indicates policy risk; market risk that may be caused by a decline in economic growth; financing channels may face financial risks due to policy restrictions