Summary:

The company's real estate business is mainly distributed in Chengdu area. The Xidi Bay project has a certain location advantage. The fourth phase of the project will be completed in 2017. The current pre-sale ratio is 28.16%. From January to June 2016, the pre-sale is 131 million yuan. Xidiwan will provide strong support for the company's performance. The company still has land reserves in Xipu Town, Pixian County, and the accelerated pace of destocking in Chengdu also ensures the company's future performance.

Compared with the gradually shrinking real estate business, the company's transformation business is progressing smoothly. In 2015, the company successfully acquired a 49% stake in Kangping Tieke and officially set foot in the high-speed rail accessories industry. In addition, the company's transformational business layout includes medical services, financial leasing and other areas.

In addition, the securities investment business is one of the key points for the company to carry out investment business. in the first half of 2016, the company achieved a total investment income of 15.1478 million yuan from all kinds of securities investment, which has become a new performance support for the company.

Profit forecast: the company achieved substantial growth in performance in the first half of 2016, mainly due to the successful completion of the equity transfer of Guangzhou Huangpu Chemical Co., Ltd., to enhance the scale of investment income for the company. At present, the company's real estate business is in a period of contraction, the layout of the project and land reserve are relatively concentrated and are located in Chengdu area, and the transportation, education and other supporting facilities around the project are complete. In addition, the company's transformation business has also been carried out smoothly, covering high-speed rail accessories, medical services, financial leasing and other business sectors in the field of investment. It is estimated that the EPS from 2016 to 2018 will be 0.53,0.39,0.48 yuan respectively, giving the "overweight" rating for the first time.

Risk tips: 1) the risk that sales in the real estate market do not meet expectations; 2) the risk of unsuccessful corporate transformation; and 3) the risk of real estate-related policy changes.