The main real estate supporting the ratings focuses on Greater Beijing and Greater Nanjing, and high-margin Beijing projects have entered a carry-over period. In 2016, the company's real estate business achieved sales of 4.39 billion yuan and settlement revenue of 3.3 billion yuan, mainly due to sales and carry-over of the Nanjing Datong Lanjun project, with advance accounts received at the end of the period of 3.17 billion yuan. In October of last year, the development equity ratio of the company's northwest Wangwang and Baiwang projects in Beijing increased to 73.82% and 81.5% respectively, greatly increasing the reserves of high-quality land. In the future, with the gradual completion of the company's projects in Beijing, it is expected to usher in a peak carry-over period. Currently, the average price of second-hand housing exceeds 70,000 yuan/square meter, the settlement area is 300,000 square meters, and the equity settlement value is 16.5 billion yuan, which guarantees the release of results this year and next two years. Lithium battery packs are about to be fully put into production, and the transformation to new energy sources has been substantially advanced. In 2016, the company accelerated the pace of transformation of the new energy lithium battery industry, completed plant purchases and the introduction of technical research and development teams, and began small-batch trial production and sales of power lithium battery packs. In 2016, it achieved sales volume of 864 kilowatt-hours. The automatic PACK production line, battery pilot R&D line, and battery production line are being stepped up. It is expected to be fully put into operation in the 2nd quarter of 2017. Since the company and Fujian Province set up joint ventures to obtain orders, it is expected to connect with state-owned energy automobile manufacturers in the province. It is expected that the production line may contribute nearly 100 million yuan in net profit after production is completed, accounting for nearly 100 million yuan in net profit Currently, the net profit to mother is about 30%. The new chairman took office in January, and the two-phase employee stock ownership plan binds the interests of many parties. In January 2017, Mr. Han Xiaohuang became the chairman of the company. Since 2006, he has been the vice chairman of the company. He has also held social positions such as member of the 11th Fujian CPPCC, member of the 10th CPPCC Standing Committee in Haidian District of Beijing, and president of the Beijing Fuzhou Chamber of Commerce. After taking office, he is expected to comprehensively promote the company's business development. In 2015-2016, the company launched two employee stock ownership plans. Purchases were completed in January and December 2016, respectively. A total of 67.78 million shares were purchased. The average increase in holdings was 7.67 yuan and 7.34 yuan respectively, binding the interests of many parties. At the same time, the company's controlling shareholders have increased their holdings by 28.99 million shares over the past 2 years, with an average transaction price of 6.94 yuan/share, demonstrating their determination to transform. The main risks faced by ratings The real estate business carried over slowly than expected; the lithium battery business progressed more slowly than expected. Valuation We forecast that the company's earnings per share in 2017-2019 will be 0.29 yuan, 0.39 yuan and 0.53 yuan respectively, giving the company a target price of 9.10 yuan/share, which is equivalent to a 20% RNAV discount, and reaffirms the purchase rating.