Key investment points The company's performance was in line with expectations, and gross margin remained stable. In the first quarter, the company achieved revenue of 3.04 billion yuan, +17.8% year-on-year; net profit to mother was 300 million yuan, +62.2% year-on-year. The company's gross margin for the first quarter was 31.97%, the same as the full year of 2016 (31.87%). Due to the increase in the number of land acquisition projects in the company's settlement projects since 2014, the company's gross margin level has declined significantly from 47.4% and 42.73% in 2014 and 2015. We believe that the company's gross margin level is unlikely to drop drastically. The gross margin level is expected to be 30.5%/29.5%/28.5% for 2017/18/19, respectively. The company's sales data is good, and the year-on-year growth rate is high. The company achieved a contract area of 267,900 square meters in the first quarter, +19.9% year over year; the contract amount was 5.112 billion yuan, +114.50% year over year. In 2016, the sales area was 1,549,400 square meters, +154% year over year; sales amount was 22.614 billion yuan, +208% year over year. The company's sales guidelines for 2017 are 1.25 million square meters and 20 billion yuan. The company's Dapan Beichen Delta has also begun to continue to contribute steadily to sales. Since opening, it has achieved cumulative sales of 18.3 billion yuan, with a sales area of 1.85 million square meters, accounting for one-third of the total construction scale. At the end of the first quarter, the company's pre-sale amount was 20.47 billion yuan, which guaranteed future settlement. With the precise layout of key cities, offsite expansion has finally paid off. Since 2014, the company has concentrated on cities such as Wuhan, Hangzhou, Chengdu, Suzhou, Nanjing, and Hefei, changing the situation depending on individual cities. The company has 30 projects in 11 second-tier cities, with a planned construction area of more than 15 million square meters. Although compared to companies in the same industry, the company had a late national layout due to excessive investment in a single project, but the company's expansion was timely, and the regional choices were right. The company has already initially grown from a regional housing enterprise (Beijing+Changsha) to a national housing enterprise. Benefit from the future development of the capital, especially the capital's cultural center and positioning as a center for international exchange. The company owns 1.25 million square meters of properties in Beijing, including landmark properties such as the National Convention Center. The company has more than 20 years of exhibition, hotel operation experience and international professional operation service capabilities, and has successfully completed reception services for a series of national, comprehensive and international conferences represented by the Olympics, APEC meetings, the Beijing Fair, and the Hangzhou G20 summit. The company's exhibition business, hotel management, etc. have become well-known brands in the industry, and has begun export management and asset-light expansion. As the construction of the Beijing Cultural Center and International Exchange Center progresses, the reputation of the company's exhibition business and self-owned properties is expected to improve markedly. Risk warning. Currently, housing prices and land prices in the company's layout are all high, and there is a possibility that the policy will continue to increase. Currently, the company's performance is still dependent on individual projects. Profit forecasting and valuation. The company's sales data is impressive, and the business layout and sales scale have reached a new level. The company is one of the few targets in the Beijing region that own high-quality properties, and has greatly benefited from the integration of Beijing-Tianjin-Hebei Province and the functional construction of the Beijing capital. We adjusted the company's 2017/18/19 EPS forecast to 0.23/0.29/0.35 yuan (the original 2017/18 was 0.26/0.30 yuan), and the company's NAV was 7.68 yuan/share. At a 20% discount, based on a target price of 6.14 yuan (27/21 times PE in 2017/18), we maintained an “gain” rating.