As a regional real estate developer, Sanxiang Impression's projects are mainly located in Shanghai and Yanjiao. The latter benefited significantly from the acceleration of the Beijing-Tianjin-Hebei strategy. After the acquisition of Impression in 2016, Sanxiang Impression implemented a dual business strategy of culture and real estate. The impression is that the series of works created by Zhang Yimou's team has annual box office revenue of over 1 billion yuan, but under the company's asset-light model, the 10-15% box office share ratio is far lower than Songcheng Performing Arts's net profit margin of 35-40%. The company plans to increase the equity ratio of new projects to 30%-50% in the future. The company expects the profit contribution of the cultural industry to surpass the real estate business within the next 2-3 years, and subsequent synergies can be expected. On the other hand, the correlation between the continuous adjustment trend of the company's stock price since peaking in August '15 and the real estate sector is significantly lower than that of the media sector, and the company's latest fund holdings are also at an absolute low level among historical and similar housing enterprises. Future market style changes or opportunities for the company's valuation repair may be ushered in. We forecast the company's earnings per share for 2017-2019 to be 0.51 yuan, 0.57 yuan and 0.63 yuan respectively. Using the segmented valuation method, we gave a target price of 9.54 yuan/share, covering the buying rating for the first time. Key investment logic that supports ratings: market style changes or opportunities. The correlation coefficient between the company's stock price and the media sector since the company peaked in August 2015 was 0.9, significantly higher than 0.55 in the real estate sector, while media, as a representative of the growth sector, has experienced continuous deep adjustments, ranking first in the industry in terms of year-to-date rise and decline. The company's current fund shareholding ratio is only 0.04%, ranking last among housing enterprises of the same size. With the recent change in market style, the company may have ushered in a good opportunity for valuation restoration. Impressions: High quality performing arts leaders, and can be expected to improve their interests. The Impressions Live Action Series was created by Zhang Yimou's director team. Currently, more than 10 productions have an audience of 5.3 million viewers and annual box office revenue of about 1.1 billion dollars. However, in the past, the company used an asset-light model with a box office share ratio of 10-15%, which is far lower than the 35-40% net profit margin under Song Cheng's asset-heavy performance model. The company said that the target share of shares in future new projects is 30%, and the proportion of high-quality projects is expected to be above 50%, or significantly increase project profitability. The company expects that the profit contribution of the cultural industry will exceed that of the real estate business in the next 2-3 years. Sanxiang article: Focus on the Yangtze River Delta and benefit Beijing-Tianjin-Hebei. The company's unsettled equity reserves are about 1 million square meters, of which about 500,000 square meters are located in Shanghai, which has an extremely high margin of safety, and 500,000 square meters in Yanjiao, which has benefited from the acceleration of Beijing-Tianjin-Hebei collaborative development and the construction of Xiong'an New Area. The estimated sales price of the project is 30,000 yuan/square meter, far exceeding the land cost of 5,000 yuan/square meter. In recent years, the linkage effect of the company's cultural real estate has gradually been reflected: after the G20 performance of “The Most Memorable Is Hangzhou”, the company won the Hangzhou plot for the first time this year, and the “Most Memories of Shaoshan Chong” is currently being produced or is collaborating with IDG to create a characteristic small town complex project. The main risk facing ratings The progress of real estate sales and settlement is affected by regulation; the share of equity increases in performing arts projects is lower than expected. In valuation, we used the segmented valuation method to give the company a target market value of 13.2 billion yuan, with a target price of 9.54 yuan/share: 1) Real estate project equity with a settlement value of 32.5 billion yuan, pure real estate business RNAV of about 11.5 billion yuan, a valuation of 9.2 billion yuan at a 20% discount; 2) Looking at the 2017 promised performance of 160 million yuan, giving a price-earnings ratio of 25 times a valuation of about 4 billion yuan.