Earnings per share for 2016 were 0.53 yuan per share, down 19.9% year on year. In line with expectations, Electronics City announced 2016 results: operating income of 1.52 billion yuan, down 16.4% year on year; net profit attributable to parent company was 4.2 billion yuan, down 19.9% year on year, corresponding to earnings of 0.53 yuan per share, in line with expectations. The company announced the 2016 dividend plan and plans to distribute a cash dividend of 1.87 yuan for every 10 shares. The amount of settlement during the period was low, which dragged down the annual results. The company achieved operating income of 1.52 billion yuan in 2016, a year-on-year decrease of 16.4%, of which real estate sales settlement revenue was 1.06 billion yuan, a year-on-year decrease of 24.8%, mainly due to the low settlement volume of the Beijing Industrial Park during the period. The comprehensive after-tax gross margin for the period was basically the same as the previous year, and remained at a high level of 42.8%. In terms of sales, the Beijing Industrial Park sold about 38,000 square meters during the company period, down 38.9% from the previous year. The Tianjin and Shuozhou projects have already begun to contribute to sales revenue, selling 14,000 square meters and 40,000 square meters respectively during the period. The park rental sector performed well. The company achieved park real estate rental revenue of 170 million yuan during the period, an increase of 6.5% over the previous year. Mainly due to the addition of some self-owned properties in the Beijing Industrial Park during the company period, the total leased construction area reached 172,000 square meters by the end of the period, an increase of about 31,000 square meters over 1H16. Net cash remained at the end of the period. The company had cash on hand at the end of the period of 4.76 billion yuan, a sharp increase of 102.0% from the beginning of the year, mainly because the company's 2.4 billion yuan non-public offering was officially launched in September last year; the company's total interest-bearing debt at the end of the period was only 630 million yuan, and the company is still in net cash status. The development trend is optimistic about the company's transformation to the technology service industry and the expansion of projects outside Beijing. In 2016, the company focused on innovation and actively explored value-added services for high-tech innovative industries. The non-public offering also introduced Hongrui Investment, an investment platform of Lenovo Holdings, which will also help promote the company's strategic transformation into a “technology service industry” in the future. In addition, while steadily advancing projects in Shuozhou, Tianjin, and Qinhuangdao, the company has also completed research on new projects in Xiamen, Kunming, Nanjing, etc., and has already won a 103,000 square meter industrial park plot in Jimei District of Xiamen. The company's expansion of projects outside of Beijing in 2017 is worth paying attention to. Earnings Forecast We maintain the company's 2017/18 earnings forecast. Valuation and recommendations Currently, the company's stock price corresponds to the 2017/18 price-earnings ratio of 15.8 times/12.5 times. We are optimistic about the value of the company's high-quality resources in Beijing and future expansion outside Beijing. We maintain the recommended rating, but we have raised the target price by 17.14% to RMB 16.40, which is 20.41% higher than the current stock price. The target price is the same as the latest NAV. Risk transformation and project development fell short of expectations.