Events: The company achieved operating income of 188 million yuan in the first quarter of 2015, a year-on-year decrease of 43.89%; realized total profit of 0.081.8 billion yuan, a year-on-year decrease of 53.22%; and net profit attributable to owners of the parent company was 0.036.3 billion yuan, a year-on-year decrease of 71.82%. The main reason for the decline in performance was that no projects were completed during the reporting period. Investment advice: The decline in current accounts led to a decline in performance. The company achieved operating income of 188 million yuan in the first quarter, a year-on-year decrease of 43.89%; realized total profit of 0.081.8 billion yuan, a year-on-year decrease of 53.22%; and net profit attributable to owners of the parent company was 0.036.3 billion yuan, a year-on-year decrease of 71.82%. The main reason for the decline in performance was that no projects were completed during the reporting period. The company's balance ratio was 76.06%, up 1.52 percentage points from the same period last year. The company's interest-bearing debt ratio is 47.25%, and advance accounts collected will be converted into the company's operating income as the project is settled, so it does not constitute actual debt repayment pressure. As of the end of the reporting period, the company held 911 million yuan in cash. Acquired 10% equity interest in Sanya Fengle Industrial. At the same time, the company announced that it plans to acquire 10% of Sanya Fengle Industrial Co., Ltd.'s shares at a price of 8.47 million yuan. After the acquisition is completed, the company will hold 51% of Sanya Fengle's shares, becoming Sanya Fengle's largest shareholder. Currently, Sanya Fengle has only processed preliminary procedures for the development and construction of 55,163.53 square meters of urban residential land on Industrial Park Road in Sanya City (No. 00900)) and 7,846.99 square meters of urban residential land (No. 00253) in Xiabaopo District, Jiyang Town, Sanya City (No. 00253), and has not carried out actual production and operation business. Hefei is a leader in state-owned enterprise reform, and has a spectacular transformation into a financial control platform. Its unique position deserves great attention. 1) The majority shareholders are officially converted. On March 5, 2015, the company received a notice from Hefei State-owned Assets Holding Co., Ltd., the largest shareholder, that it intends to transfer all state-owned shares held by the listed company to Hefei Xingtai Holding Group Co., Ltd. free of charge. After the above free transfer matters are completed, Hefei State Control will no longer hold shares in listed companies; Xingtai Holdings will hold 1853,1118 company shares, accounting for 57.89% of the company's total share capital. 2) There is a unique position that deserves close attention. It is worth paying close attention to the fact that on the day Hefei Urban Construction shares were transferred to Xingtai Holdings, all shares in Hefei Department Store held by Xingtai Holdings were transferred to Hefei Construction Investment Holdings. Hefei Xingtai no longer holds any shares in Hefei Department Store. Meanwhile, Hefei Guofeng Group was transferred to Hefei Industrial Investment Holdings. According to the current state-owned capital platform construction framework, the three major platforms of financial control, urban construction investment, and urban industrial investment all own and only listed companies. Hefei Urban Construction followed the trend and became currently the only listed company with the highest state-owned shareholding ratio in Hefei and the only financial control platform (previously, Hefei Xingtai also held 6.26% of Meiling Electric's shares, making it the second largest shareholder of a listed company. On March 5, 2015, Meiling Electric announced that all shares held by Hefei Xingtai will be transferred to Hefei Industrial Investment Holdings (Group) Co., Ltd.). Investment advice. Without considering any asset injection expectations, we expect the company's earnings per share in 2015 and 2016 to be $0.68 and $0.78, respectively. As of April 22, the company closed at 23.85 yuan, corresponding to PE for 2015 and 2016, 35.07 times and 30.58 times, and RNAV corresponding to 11.38 yuan. We believe that there are changing expectations for future development roadshows after the majority shareholders of the company have changed. Referring to companies with similar types of transformation and asset injection expectations, we believe that the market value of urban construction in Hefei should be higher than Langfang's development and lower than Guangzhou Friendship, giving a target market value of 9 billion yuan and a target price of 28.13 yuan. According to the 2015 EPS estimate, it corresponds to 41.37 times PE, maintaining the “increase in holdings” rating. Risk warning: There is currently uncertainty about whether the majority shareholders of the company will be able to inject assets.