Matters: The company announced its 2015 annual report, achieving operating income of 3.65 billion yuan, a year-on-year increase of 56.9%, and net profit attributable to shareholders of listed companies of 417 million yuan, a year-on-year decrease of 18.0%, achieving an EPS of 0.31 yuan, which is basically in line with the data disclosed in the previous performance report. The company plans to distribute a cash dividend of 1.20 yuan (tax included) for every 10 shares. Ping An's view: After deducting a high increase in non-net profit, gross margin declined slightly: Due to a sharp increase in settlement area, the company's revenue rose 56.9% year on year during the period, but due to the transfer of 7.05% of shares in Zhongzhou Holdings in 2014 and the increase in the net profit base of 233 million yuan, the net profit in 2015 fell 18% year on year, and net profit after deduction rose 57.9% year on year. Due to lower gross margins in Changsha and Huiyang, which were settled, the full-year gross margin fell 1.9 percentage points to 34.6% year on year. As settlement revenue ($3.65 billion) was greater than the contract amount ($3.2 billion), advance payments at the end of the period fell by 570 million to 870 million yuan from the beginning of the year. The subway cooperation project has entered a harvest period and is expected to increase by 24% in 2016: the company achieved sales of 3.2 billion yuan in 2015 and a sales area of 310,000 square meters (excluding the 2,001 billion sales of the Jinhui KAPA project with the Shenzhen Metro Group), down 0.8% and 1.3% year on year, including a 62.5% year-on-year increase in sales after the subway project. The company plans to have sales of 4 billion dollars in 2016, an increase of 24.8% over the previous year. Considering that in 2016, the company's subway cooperation project Phase II, Changsha Zhenye City Phase II, Dongguan Songhu Yayuan, and Nanning Zhenye Shangfu, etc., there is a high probability that the sales target will be achieved. The pace of land investment has slowed, and the debt ratio has increased. The pace of the company's land acquisition and investment slowed in 2015, adding only a plot in Nanning, covering an area of 13,400 square meters. In March 2016, 108 million yuan was awarded land in Ebu Town, Shenzhen-Shantou Special Cooperation Zone, with a construction area of 217,000 square meters. It successfully issued 1.5 billion corporate bonds during the period, with cash in hand of 1.78 billion dollars, 1.53 times the debt maturing within one year. The short-term debt repayment pressure was less. The net debt ratio at the end of the period was 73.9%, up 23 percentage points from the beginning of the year, and the balance ratio after excluding advance payments was 57.7%, up 5.9 percentage points from the beginning of the year. Profit forecasts and investment ratings. It is estimated that the company's 2016-2017 EPS will be 0.35 yuan and 0.39 yuan respectively, and the corresponding PE will be 23.3 times and 20.7 times, respectively. As an enterprise directly under the Shenzhen State-owned Assets Administration Commission, the company is expected to benefit from policy dividends brought about by state-owned assets reform in the future. Maintain a “Recommended” rating. Risk warning: The risk that sales volume and performance will fall short of expectations.