The restructuring plan has been approved by the Securities Regulatory Commission, important matters have been verified, and stock trading will resume on October 24. Key investment points: The absorption, merger, and separate listing plans have been approved by the Securities Regulatory Commission. CITI Holdings issued 244.596 million shares to all shareholders of Yangchen B shares, absorbing and merging Yangchen B shares with a 1:1 share conversion ratio and an exchange price of 15.50 yuan/share. After the merger, the surviving Fangcheng Investment Holdings (share capital increased from 298.7524 million shares to 323.2110 million shares) will arrange for Environment Group, a wholly-owned subsidiary, to undertake all assets, liabilities, business, etc. of Yangchen B shares; the merged Fangyangchen B shares will be terminated. After the merger came into effect, CITI Holdings implemented the separation of Environmental Group by continuing the separation. CITI Holdings (share capital of 2529.576 million shares) continued to operate real estate and equity investment business, and Environmental Group changed to Shanghai Environment (share capital of 702,544 million shares), and applied for the listing of its shares on the Shanghai Stock Exchange. The controlling shareholders of CITI Holdings and Yang Chen B shares are both Shanghai City Investment. The actual controllers are all from the Shanghai State Assets Administration Commission. The controlling shareholder and actual controller did not change after the transaction was completed, so this does not constitute a backshell listing. Gross margin has rebounded, and the three-fee rate has been significantly reduced. In the first half of '16, the company achieved operating income of 4.83 billion yuan, an increase of 79.6% year on year; net profit of 1.49 billion yuan, a year-on-year decrease of 49.6% due to the large amount of investment income in the same period last year; and non-net profit of 1.07 billion yuan, an increase of 29.5% over the previous year. The comprehensive gross profit margin was 34.2%, up 9.1 percentage points from the beginning of the year; the net debt ratio was only 30%, down 2 percentage points from the beginning of the year, far below the industry average; the balance ratio was 49%, down 4 percentage points from the beginning of the year; and accounts received in advance were 3.67 billion yuan, down 1.24 billion yuan from the beginning of the year. The cost of comprehensive financing was 5.88%, up 0.21 percentage points from the beginning of the year. Furthermore, the company expects net profit of about 3.13 billion yuan in the first three quarters. Due to the large amount of investment income obtained from stock sales in the same period last year, there was a decrease of about 38% over the same period last year. The asset management business is developing rapidly, and there is much to be done. Expand investment channels and improve business layout. As of the end of the first half of the year, the company held financial equity with a market value of about 12.98 billion yuan, a holding cost of 2.89 billion yuan, and a book profit of 10.09 billion yuan. It participated in the investment of Hongyi Phase 8 Fund, and plans to participate fully in the fund-raising and allocation of Western Securities with no more than 750 million yuan. Its subsidiary, Chengding Fund, has added 5 new investment projects, including a fixed increase of 2 and PE 3, with a cumulative investment amount of 340 million yuan. As of 16H, Chengding Fund has invested in 67 projects, including 42 PE, a fixed increase of 25, with a cumulative investment of 5.74 billion yuan. The restructuring was approved to accelerate the transformation of the company into a comprehensive asset management group with urban infrastructure and related fields as the main investment direction. The development model is shifting from asset-heavy to asset-light. The model is unique, and long-term high growth development is worth looking forward to. RNAV is 20 yuan/share, without adjusting the profit forecast yet. The estimated operating income for 16-18 is 87, 115, and 14.7 billion yuan, with year-on-year growth rates of 9%, 33%, and 28%, respectively, and a three-year compound growth rate of 22.5%; in 16-18, the total share capital after absorption was reduced to 0.74, 0.87, and 0.96 yuan, with a compound growth rate of -7.5% over three years, corresponding to the current stock price of PE 20, 17, and 15 times the six-month target price, corresponding to 27 times PE in '16, maintaining a “highly recommended” rating. Risk warning: The market fluctuates sharply, asset restructuring progress falls short of expectations, and policy regulation affects risk appetite.