The performance review company issued a preliminary reduction announcement for the first quarter. It is expected that the net profit attributable to shareholders of listed companies in the current period will drop by about 80% compared with the same period last year. Management analysis: Land transfer compensation was reduced, and net profit declined significantly: in the first quarter of 2017, the company's net profit declined significantly. The main reason was that during the same period last year, China Material Storage and Transportation Tianjin Co., Ltd., a wholly-owned subsidiary, transferred part of the land owned by means of deposit. The Tianjin Hedong District Land Consolidation Center paid compensation and confirmed revenue of 310 million yuan. There was no such revenue for the same period this year. Net profit is expected to drop by about 80% to only $46 million. In the same period in 2016, the company's net profit was $229 million. The logistics business is picking up, with net profit turning a loss into a profit: Although the company's net profit has declined sharply, net profit is expected to turn a loss into a profit, reaching 27 million yuan, compared to just -4.27 million yuan in the same period last year. The logistics business was affected by the stabilization of the domestic economy, the recovery of commodity prices, and the acceleration of inventory turnover. Beginning in 2016, all sub-businesses grew significantly. In particular, the warehousing, distribution and transportation business picked up, contributing most of the increase. This also benefited from the company's active expansion of the integrated logistics supply chain model. The company's revenue in the Beijing-Tianjin-Hebei region has reached 26%. Under the collaborative development of Beijing-Tianjin-Hebei Province and the multiple strategic catalysts of Xiong'an New Area, it will inevitably bring efficiency improvements to logistics companies in the region. There is potential for future development of the company's logistics business. The mixed reform introduced Prologis to explore the transformation and upgrading of traditional warehousing: the company is also actively exploring business transformation and upgrading. (1) The company acquired 51% of HenryBath Group's shares and became the first enterprise with a full license for domestic and international futures delivery warehouses, which is of great significance to the company's strategic layout and business transformation at home and abroad. (2) Prologis participated in a fixed increase of 2 billion yuan. As a leader in the logistics real estate industry and a strategic investor, it has now cooperated and communicated in warehousing and logistics business development, remuneration system optimization, etc., and is actively promoting the establishment of joint ventures. (3) Chengtong Group, the majority shareholder of the company, has set up a 300 billion yuan state-owned capital management fund platform. It is expected that there will be substantial reforms in the incentive system and logistics real estate. At present, the majority shareholder of China Reserve Corporation still has more than 2 million square meters of land resources yet to be injected. Of these, about 900,000 square meters of land also has the conditions for upgrading high-end logistics real estate. The investment proposal company is currently in a transition period. Through the acquisition of shares in HB Group, which has an LME delivery warehouse license, it has entered overseas business, and joined hands with Prologis to develop logistics real estate. Long-term transformation and upgrading is worth looking forward to. As a model project for central enterprise reform, multiple regional strategies are superimposed to maintain the “buy” rating. The 2017-19 EPS is expected to be 0.36/0.38/0.43 yuan, respectively. Risks suggest that business transformation has not met expectations, and that the progress of national and regional strategies has fallen short of expectations.