Investment points Our point of view: The company is affected by Shenzhen's strict “three limits” policy in the short term, and sales may be affected, but the company's financial situation is good, and there is no hurry to reduce sales prices to eliminate scarce products with extremely high value. At the same time, the company's ability to obtain land projects with controllable costs in Shenzhen is also outstanding, and it is expected that it will be injected into a parent company's Shenzhen project this year. We maintain the company's 12-month target price of HK$4.96, which is equivalent to 40% of the NAV discount, corresponding to 12, 11, and 10 times PE of the 2017-2019 core net profit, with room for growth of 37.8% compared to the current price, maintaining the buying rating. Currently, the number of tradable shares of the company purchased through the “Shanghai-Hong Kong Stock Connect” channel has reached 285 million shares, accounting for 3.72% of the issued tradable shares, showing that mainland investors recognize the company. Annual results were in line with expectations, with additional special dividends: 2016, the company's operating income was HK$21.354 billion (same below), up 10.5% year on year; gross profit was $8.27 billion, up 29.7% year on year; overall gross margin was 38.7%, up 4.1 percentage points year on year; of these, gross margin of real estate development business reached 41.3%; core net profit was $2.62 billion, up 21.1% year on year, and the company's performance was in line with expectations. The company has increased its dividend payout efforts, with a final dividend of 10 HK cents and an additional special dividend of 5 HK cents, plus 7 HK cents per share in the medium term, for a total of 22 HK cents for the whole year. The dividend rate has reached 35% of the core net profit, and the current dividend yield is over 6%. Strong balance sheet: The company maintained a strong balance sheet. As of the end of 2016, the net debt ratio was 38.9%, which is at a low level in the industry, and the financial position is sound. The company's total interest-bearing debt fell to 22.6 billion yuan, including parent company loans of 2.85 billion yuan, short-term debt of only 5.3 billion yuan, and cash holdings of 12 billion yuan at the end of the period. The company had enough “ammunition” to make a difference in the land market this year. The average cost of financing for companies has increased to 4.9%, mainly affected by US interest rate hikes, but remains at a very competitive level in the industry. Risk warning: macroeconomic growth is slowing, industry restrictions are being tightened, and company sales fall short of expectations.