Highlights of the report describe that Sunshine Co., Ltd. disclosed its 2015 annual report today. In 2015, the company achieved operating income of 648 million yuan, a year-on-year decrease of 52.33%, net profit of 0.2 billion yuan, an increase of 103.45%; a net profit margin of 3.12%, an increase of 46.19 percentage points over the previous year. EPS 0.03 yuan. Among them, the fourth quarter achieved revenue of 193 million yuan in a single quarter, a year-on-year decrease of 59.38%, and net profit of 102 million yuan, an increase of 100.35% over the previous year. Incident review The sharp rise in investment income has boosted profits. The company's revenue fell 52.33% year on year for two reasons: (1) Real estate sales fell by 64.33% year on year, mainly due to the lack of advantages in the location of the Tianjin project, which was difficult to eliminate, and the slowdown in the carry-over of the Chengdu project. (2) Investment real estate rental revenue fell 29.77% year on year, mainly due to excessive supply of commercial and office buildings in second-tier cities such as Chengdu, and high vacancy rates, which led to a drop in rents. The company's net profit in 2015 rose 103.45% year on year, mainly due to the large investment income brought by the company's sale and divestment of traditional projects, which caused the company to turn a loss into a profit this year. The results are expected to grow steadily in the coming year. The company renovated nearly 100,000 square meters of self-owned properties in Beijing Sunshine Tower and Shanghai Galaxy Hotel in 2015. The commercial market space in Beijing and Shanghai is improving, and the upgrading of core self-owned properties will help contribute to steady performance in the future. Traditional real estate is gradually being divested, and inventory removal is being rapidly promoted. In 2015, the company successively sold 45% of the shares of the subsidiary Ruijing Sunshine, 100% of the Beijing Ruigang shares held by the subsidiary Beijing Ruifeng, and 51% of the shares of Linhua Sunshine and Yangling Guanghui each held by the subsidiary. After the divestment of these three assets, the company's traditional real estate development projects were mainly the Tianjin Yangliuqing Project, the Chengdu Jinshang Project, and the Beijing Sunshine Shangdong Project. These projects achieved total sales of 27,000 square meters in 15 years. Next, the company will increase sales efforts for these three projects and complete the removal of these inventories and the divestment of the projects as soon as possible. Business areas are focused, creating new possibilities for asset-light operations. While speeding up the divestment of traditional projects, the company continues to focus on the asset-light operating model of owned property management, which is mainly reflected in management fee income and asset appreciation due to commercial and office leasing and transformation and exit of inefficient non-performing assets. This asset-light model makes the company go to battle lightly and be more dynamic. On the regional side, the company's current investment properties are mainly focused on Beijing, Tianjin, Shanghai and some second-tier cities. In the future, the company will further reduce its management radius and highlight the advantages of concentration. Investment rating: The company's NAV valuation is 10.01, and the current stock price is discounted by 47.85%. EPS is expected to be 0.09 and 0.13 yuan/share in 2016 and 2017, respectively, giving a buying rating.