Main points of investment:

Events. The company publishes its 2016 annual report. During the reporting period, the company realized operating income of 1.18 billion yuan, an increase of 19.1% over the same period last year; net profit belonging to shareholders of listed companies was 153 million yuan, an increase of 16.6% over the same period last year; and basic earnings per share was 0.23 yuan (fully diluted earnings per share was 0.19 yuan). This year, the company pays out 0.2 yuan (including tax) in cash for every 10 shares, and the company plans to increase 10 shares for every 10 shares to all shareholders in the form of capital reserve.

In 2016, driven by the carry-over of industry carriers and the increase in rental income, the company's revenue increased by 19%; over the same period, the company's net profit increased by 16.6%. In 2016, the company's industrial carrier signed a contract area of 339, 000 square meters, with a contract amount of 917 million yuan, an increase of 17.88% over the same period last year. By the end of 2016, the company had rented real estate, with an annual rental income of 210 million yuan. In 2016, the company led a total of seven projects under construction, involving a total floor area of more than 700000 square meters. Among them, the wedge-shaped green space project, with a total planning area of 16.51 million square meters, is also the first time for the company to set foot in pension real estate. By the end of 2016, there were more than 150 cloud computing and big data enterprises in the park, forming a variety of cloud service platforms such as "government cloud, medical cloud, office cloud, education cloud, financial cloud" and other cloud service platform. there are five levels of industrial chain: infrastructure layer, system platform layer, cloud application platform layer, value-added service layer and supporting end product layer. During the reporting period, Shibei High-tech Park also became the first national demonstration zone for the transformation and upgrading of the Yangtze River Economic Belt, and was included in the "Shanghai 2016-2040 Urban Master Plan" to create a high-energy innovation engine.

Since 2016, the company has acquired a total land reserve of 171000 square meters. In December 2016, Shanghai Chuangyue Investment Co., Ltd., a wholly owned subsidiary of the company, was granted a 40% stake in Shanghai Talent Market newspaper Co., Ltd., with a transaction price of 200 million yuan. In February 2016, the company set up a special asset management plan of 1.25 billion yuan to provide loans to its subsidiary Shanghai Venture Company. In July 2016, the company contributed 200 million yuan to participate in the establishment of an investment fund-Shanghai volcanic Stone Phase I Equity Investment Partnership (Limited Partnership).

Investment advice. Benefiting from the construction of data trading centers and scientific and technological innovation centers, equity investment is expected to grow rapidly. The company is located in the "boutique park" integrated operators, service integrators and investors, and has laid out 3.13 square kilometers of Shanghai Zhabei North High-tech Industrial Park and 5.2 square kilometers Nantong Science and Technology City Industrial Park. At present, the economy of Shibei High-tech Park is growing at a high rate of 30% a year, and the proportion of producer services in the park has exceeded 90%. The company holds a total of 1.18 million square meters of equity. At the same time, in the next five years, the north high-tech park in the city can develop 2.6 million square meters, and Nantong reserves 4200 mu of land. In recent years, the company has increased its investment in venture capital business, and its future development is promising. We expect the company's EPS to be 0.27 yuan and 0.35 yuan in 2017 and 2018. Considering that the company is within the scope of the Great Zhangjiang River and is expected to enjoy policies such as the construction of Shanghai Science and Technology Innovation Center and data Trading Center (with market uniqueness) in the future, and benefit from the merger of Jing'an and Zhabei, we give the company 80 times PE in 2017 and a "buy" rating corresponding to the target price of 21.30 yuan in the next six months.

Risk hint: the industry is facing the risk of raising interest rates and policy regulation.