Company News Shenzhen Holdings signed investment agreements with Kailong Real Estate and Evergrande Real Estate (both subsidiaries of 3333.HK Evergrande Group) to inject capital into Evergrande Real Estate to obtain approximately 2.05% of its expanded shares. Review the impressive dividend yield. According to the performance promises made by Evergrande Real Estate, as shareholders, Shenzhen Holdings will receive dividend yields of 6.2%, 7.8%, and 8.6% respectively in FY17, FY18, and FY19. The company will maintain a healthy cash flow and balance sheet. Shenzhen Holdings will invest 5.5 billion yuan this time. We believe this capital can be easily covered by the company's income from the disposal of third- and fourth-tier city projects in May (about 5.4 billion yuan). Meanwhile, according to the company's FY17 cash flow forecast (excluding these two transactions), the company will continue to maintain a steady net debt ratio. The stock price of Shenzhen Holdings may be under pressure. Considering domestic real estate regulation and the increasingly strict regulatory environment, we believe that the Securities Regulatory Commission may not approve the asset restructuring and listing application of Evergrande Real Estate and Shenzhen Housing (000029.SZ) in the short term. This will also have a negative impact on Shenzhen Holdings. The valuation proposal maintains the recommended and target price of HK$4.5 (21% increase), taking into account the company's high quality and sound fundamentals and improvements in land reserves. The company's current stock price corresponds to an expected price-earnings ratio of 9.9 times in 2017, and a 55% discount on net assets per share compared to the 2017 forecast. Risk Evergrande Real Estate and Shenshen Real Estate (000029.SZ)'s asset restructuring and listing failed.