The 2016 results were 0.32 yuan per share, +1.5% year-on-year, below expectations. Huayuan Real Estate announced 2016 results: operating income of 7.61 billion yuan, up 2.1% year on year; net profit attributable to parent company was 740 million yuan, up 1.5% year on year, corresponding to earnings of 0.32 yuan per share. The company announced the 2016 dividend plan and plans to distribute a cash dividend of 1 yuan for every 10 shares. Project settlement volume is low, and gross margin is declining. The company's real estate settlement revenue for the period was 7.47 billion yuan, a slight increase of 1.6% over the previous year, lower than expected. Mainly due to Beijing Xihongshi and Tianjin Boston, 43 #项目受政策性停工影响（政府要求工地停工治理雾霾），期内未能及时结算利润（两个项目期末合计预收余额24 .2 billion yuan). At the same time, the company's gross margin for post-tax settlement during the period fell 3.6 percentage points to 13.2% year on year, mainly due to a large number of limited-price housing and self-occupied commercial housing in Heshu in Beijing, where gross margins were lower during the period. The sales and payback performance was impressive. During the period, the company achieved real estate sales of 10.78 billion yuan and a contract area of 780,000 square meters, with significant year-on-year increases of 129% and 88%, respectively. Apparent repayments of $9.86 billion during the period led to an increase of 84% over the beginning of the period to $5.30 billion in advance accounts, laying a good foundation for 2017 settlement. Huayuan Yingdu Asset Securitization recorded an investment income of 350 million yuan. During the period, the company securitized assets using the rental property held in Block D of Yingdu Building as the target, successfully achieved financial innovation, and recorded an investment income of 350 million yuan. Trend results are expected to be released in 2017, and new projects outside Beijing will be promoted at an accelerated pace. With the centralized settlement of Beijing Xihongshi, Beijing Huaxin, and Tianjin Boston in 43 #项目在2017, we expect the company's settlement revenue and gross margin to increase significantly in 2017. At the same time, the company's plans to start new construction in 2017 have increased significantly to 1.18 million square meters (only 103,000 square meters in 2016), accelerating the development of new projects outside Beijing, such as the Huashidai in Changsha, the Hangu Project in Tianjin, and the Dayi Mountain Villa in Guangzhou, etc., and is expected to achieve the same level of sales throughout the year as in 2016. Profit forecast We maintain the company's 2017 earnings forecast of $0.47 per share and introduce a 2018 earnings forecast of $0.52 per share. Valuation and recommendations Currently, the company's stock price corresponds to the 2017/18 price-earnings ratio of 11.1 times/10.1 times. We maintain the company's neutral rating and target price of $5.17. The risk property market regulation policy has been further upgraded.