Incident: Dima Co., Ltd. released its 2016 annual report. According to the annual report data, the company achieved operating income of 14.27 billion yuan (+85% year over year) and net profit to mother of 780 million yuan (+66% year over year). Real estate performance increased dramatically, leading to an increase in overall profits. (1) Real estate performance has improved dramatically. In 2016, the company's real estate business performance soared, with revenue reaching 13.3 billion yuan (+98% year over year), accounting for 93% of the company's total revenue. The real estate business led to an increase in the company's profitability by optimizing capital structure and reducing financing costs. (2) It is expected that the company's real estate business layout will be more reasonable. In 2016, the sales area and sales volume of commercial housing nationwide reached 1,573 billion square meters (+22.5% year over year) and 11.76 trillion yuan (+34.8% year over year), respectively. The company used the growth of the real estate market to improve real estate performance. In 2016, the company added 14 new land reserves, added more than 3.2 million square meters of construction area, and obtained land resources from Shanghai, Wuhan, Nanjing, Hangzhou, Suzhou, Chengdu, Chongqing and other important economic development core cities along the Yangtze River to East China. It is expected that the company will continue to deepen its business layout in the core cities of the Yangtze River Economic Belt in the future, and the real estate industry performance is expected to maintain steady growth. Restart the fixed increase plan to improve military industry performance. In 2016, the company's special vehicles achieved annual business revenue of 800 million yuan, accounting for 6% of revenue. The company restarted the fixed growth plan in February 2017. In the future, it will use shareholder advantages and broad prospects for civil-military integration to achieve performance improvement. (1) A fixed increase will enhance military industry performance. On February 20, 2017, the company issued an announcement stating that it plans to raise 1,073 billion yuan in capital by issuing shares to Weihai Poly and Poly Phase I to use for new military special vehicle equipment projects and exoskeleton robot projects to enhance the company's military business strength. (2) Poly settled in and became the second shareholder, and the company's shareholder background strengthened. Weihai Poly and Poly Phase I are both funded by Poly Defense (Poly Group). Poly Defense Investment is the only equity investment platform in the military sector under Poly. After the fixed increase is completed, Poly Department will become the company's second shareholder, accounting for 6.59% of the shares. The company joined hands with Poly through fixed growth, and the strength of shareholders has been strengthened. (3) Civil-military integration has broad prospects and will drive the company's development in the future. Since 2013, the importance of civil-military integration has gradually increased. **** pointed out the need to incorporate military innovation into the national innovation system, promote the in-depth development of civil-military integration, and once again emphasize civil-military integration during the two sessions. We believe that under policy encouragement, the prospects for civil-military integration are broad. Combined with the advantages of cooperation with the Poly Group, it is expected that the company's military special vehicle sales prospects will be promising in the future. Three Gorges Life has been approved for construction to promote the integration of industry and finance. (1) Three Gorges Life Insurance has been approved for construction, and life insurance licenses are scarce. The Three Gorges Life Insurance Company, which participated in the establishment of the company through its subsidiary Chongqing Dima Industrial Co., Ltd., obtained permission from the Insurance Regulatory Commission on March 23, 2016. According to the CIRC regulations, the insurance company should complete the preparation work within 1 year from the date of receipt of the approval preparation notice, and it is expected that it will successfully obtain approval from the Insurance Regulatory Commission for business. Although the Insurance Regulatory Commission has gradually increased the number of insurance licenses in the past two years, life insurance licenses are still scarce. (2) Customers are rich in resources and are expected to achieve internal migration. In the process of developing the real estate business, the company has established complete and rich sales channels, accumulated a large number of customer resources and partner resources, and covered a wide range of potential customers. The company has an innate advantage in carrying out insurance business, which can achieve internal transformation of customer flows and integration of sales channels, and shorten the profit cycle of life insurance companies. (3) The wealth structure of residents has been transformed, and the life insurance industry has more room for development. The share of financial assets in China's residents' asset allocation continues to rise to more than 40%, and in 2015, China's insurance density was 1,766 yuan/person (equivalent to 271.77 US dollars/person), far lower than the insurance density of about 4,000 US dollars/person in the US, Japan, the UK, and France during the same period. Demand for life insurance is increasing due to the transformation of residents' wealth structure and aging, and the life insurance industry still has a lot of room for development. (4) Enjoy the dividends of building a financial center in Chongqing. The company's financial business can significantly benefit from Chongqing's establishment of an important domestic functional financial center and policies such as the “Belt and Road” and “Yangtze River Economic Belt” to strengthen regional advantages. Shareholder return plans and equity incentives demonstrate confidence in the company's development. On November 1, 2016, the company completed the granting of restricted shares in the first installment of the equity incentive plan, with 151 people granted, reaching 72.998 million shares. On February 20, 2017, the company announced the shareholder return plan for 2017-2019, demonstrating the company's confidence in future development. It is expected that the company's operating efficiency will improve, and long-term performance development can be expected. Investment advice: Buy-A investment rating, 6-month target price of 10.6 yuan. We expect the company's EPS from 2017 to 2019 to be 0.36 yuan, 0.48 yuan, and 0.58 yuan respectively. Risk warning: macro risk, market risk, credit risk.