Event: announcement semi-annual report 2016, operating income 802 million yuan (+ 407.47%), return net profit 5.9 million yuan (+ 106.65%), non-return net profit 6.3 million yuan (+ 107.09%), basic earnings per share 0.0066 yuan.

Main points of investment

In the first half of 2016, the real estate market continued to improve at the end of last year, and inventory pressure eased somewhat. At the same time, the construction of long-term mechanisms such as new urbanization and regional integration has been steadily advanced, the "business reform and increase" has entered the implementation stage, the top-level design of the housing rental market has been introduced, and the construction of the housing system has been gradually improved.

In the second half of 2016, the company's first Yixing pension real estate project will also be introduced to the market. At present, the company is actively negotiating and cooperating with professional pension medical institutions, introducing brand old-age service operators and service providers, and focusing on creating a boutique pension community.

Profit forecast and investment suggestions: the company's revenue improved during the reporting period, mainly due to the good sales performance of many projects in the first half of the year, especially the residential delivery of the Yancheng project, resulting in a large increase in operating income and profits. Under the pressure of releasing the main business inventory, actively promote the transformation of the company, pension real estate project development business is still in the cultivation stage. We estimate that the EPS of the company from 2016 to 2018 will be 0.20,0.19,0.21 yuan respectively, corresponding to 38.4,40.4 and 36.6 times, respectively, and the "overweight" rating will be given for the first time.

Risk tips: policy tightening and inventory pressure