Zhongzhou Holdings released its 2016 three-quarter report, achieving operating income of 5.37 billion yuan, an increase of 71% over the previous year, and net profit of 0.8 billion yuan, a decrease of 80% over the previous year. The pace of sales growth did not stop: The company's settlement revenue continued to grow rapidly in the first three quarters, but the downward trend in gross margin remained unchanged. By the fourth quarter, in addition to the central city-state of Chengdu and Shanghai Junting projects, projects such as Huizhou are also expected to enter a centralized carry-over cycle. It is expected that the overall profit margin will recover, but it is difficult to recover to the level of 2015. According to our tracking, the company achieved sales of about 8.5 billion dollars in the first three quarters, an increase of about 40% over the previous year. The current saleable value of the company is still concentrated in Shanghai, Chengdu, Huizhou, Qingdao, etc. Since the opening of the Qingdao Peninsula Chengbang project in the second half of the year, it has been well eliminated. We believe that the company's annual target of 10.5 billion dollars is within easy reach. There is a possibility that it will be exceeded, and it has maintained rapid growth for 3 consecutive years. There was no new land storage, and stock value gradually became prominent: the popularity of the land market made the company not add new projects in the third quarter, but it is worth emphasizing that this also brought an opportunity for revaluation of the company's stock resources. With the rapid release of sales, the company's cash flow improved dramatically, and the net debt ratio at the end of the third quarter declined rapidly compared to the middle of the year, which was basically the same as at the beginning of the year. Furthermore, the company's fixed increase has already passed, and it still needs to be officially approved. Furthermore, the company plans to publicly issue no more than 900 million bonds, which are currently awaiting review by the Shenzhen Stock Exchange. However, what we need to be wary of is that housing enterprise financing is expected to face tightening regulations recently, and corporate refinancing still needs to track subsequent progress. Equity incentive+employee shareholding strengthens the team's common interests: Since last year, the company has launched an incentive mechanism twice: 1. The first phase of the equity incentive plan has now been unlocked; 2. The employee stock ownership plan will enter a lockdown period. We believe that the two-time incentive system will help bind the unanimous interests of management and employees and promote the development of the company's business. The company clearly proposed exploring new business development and thinking about corporate transformation this year. The smooth implementation of the incentive system will also add further impetus to the company's growth and transformation path. Profit forecast and investment rating: The company's EPS from 2016 to 2017 is expected to be 0.70 yuan and 0.97 yuan respectively, maintaining the “buy” rating.