Main points of investment:

Expect a big change in the situation of weak profitability. The company recorded operating income of 16.51 million yuan in the first half of the year, an increase of 10.94% over the same period last year, mainly due to the increase in trade and service business in the current period, of which trade income of 117.1 billion yuan exceeded the level of 10.81 million yuan in 2015, with a gross profit margin of 12.41%; service income of 4.79 million yuan, gross profit margin of 59.60%, while 15H only had rental business income of 516000 yuan in the same period. However, due to the low gross profit of trade income, the interest of entrusted loan of 5.92 million yuan (15H: 170,000 yuan) and the loss of securities investment of 7.1355 million yuan, the final net profit belonging to the parent company is-14.29 million yuan (15HRZ-4.44 million yuan). Since 2015, the major shareholders of the company have clarified the development strategy of the company focusing on Langfang and ploughing Langfang, constantly seeking new project resources and new development, hoping to improve the company's lack of main business and weak profitability. Langfang, the actual controller of the company, has certain high-quality resources, and in April, it also launched a major asset restructuring process (which has been terminated in failure). The market has long been looking forward to the positive changes that may take place in the company.

The dispute over the equity of the largest shareholder of Evergrande has escalated. Evergrande Real Estate Group bought 19.028 million shares of Langfang Development on April 11 / 12, accounting for 5.005%, listing for the first time and becoming the second largest shareholder; after the resumption of trading, the company increased its total stake by 4.995% from July 27 to 29 to 10%. The average price of the two increases is 15.30 yuan 14.06 yuan per share, with a total of 14.68 yuan per share, which does not rule out the possibility of continued increase. At present, Langfang Investment holding Group, a major shareholder, holds 13.50% of its shareholdings. According to the plan announced by the major shareholders, it plans to increase its holdings by 0.5-500 million yuan (600000 shares, 8.6666 million yuan per share at a cost of 14.4 yuan per share) within 6 months after the resumption of trading. We assume that the total holdings of major shareholders can be increased by about 6.46% to nearly 20% at a cost of 20 yuan per share, while it will cost about 1.5 billion yuan for Evergrande to increase its holdings to 29.g9%. According to the data of the recent shareholders' meeting, as the only listing platform under Langfang State assets, major shareholders are not willing to give up control over listed companies easily. For the company with a market capitalization of only 7.4 billion yuan, Evergrande, which has strong assets, increased its stake in the company by nearly 5% in just a few days after the company resumed trading, and is willing to spend billions to continue to fight for control.

16H has an asset-liability ratio of 47%, basically no interest-bearing liabilities, and a market capitalization of only 7.4 billion yuan. It is worth paying attention to the dispute over equity brought about by the dispersion of equity, and the possible changes in the fundamentals of the company in the future. As a contested shell company, the shell value is more valuable than the profit forecast at present. It is suggested that we should continue to pay attention to the price fluctuation opportunities that may be brought about by the equity dispute. It is prudent to estimate that the EPS for 16-18 will be 0.02,0.02,0.02 yuan, maintaining the "recommended" rating.

Risk hint: the uncertain risk of the equity dispute and the risk that the improvement of the main business is less than expected.