Key investment matters: The company announced the 2016 interim report. In the first half of the year, it achieved operating income of 1.37 billion yuan, an increase of 126.8% over the previous year, net profit attributable to shareholders of listed companies of 4.782 million yuan, reversal of losses over the previous year, and achieved an EPS of 0.0033 yuan/share, in line with expectations. Ping An's view: Performance reversed losses year over year, and the impact of taxes and fees gradually disappeared: During the period, the company achieved revenue of 1.37 billion yuan, an increase of 126.8% year on year, and net profit of 4.782 million yuan. Net profit was significantly lower than revenue, mainly due to a decrease in gross margin of 27 percentage points to 17.7% year on year. The share of business taxes and surcharges in revenue fell 37 percentage points to 9.1% year on year, and the impact of taxes and fees gradually weakened. In the first half of the year, the company achieved a real estate sales contract amount of 1.52 billion yuan, with a contract area of 106,000 square meters. During the period, the company increased for the first time since completing its listing. It issued 270 million non-public shares at a price of 5.64 yuan/share (of which 110 million shares were subscribed to by Electric Construction Real Estate), raising a total capital of 1.53 billion yuan. Excluding advance receipts, the balance ratio is 70.7%, and the coverage ratio of monetary capital to short-term liabilities is 101.8%. The financial situation is relatively stable. Commercial operation capacity continues to improve, and the pace of land development in key regions is accelerating: the company's main business is commercial real estate development and operation, forming product lines such as regional Fanyue Mall, neighborhood Fanyue Mall, and Neighborhood Fanyue Square. During the reporting period, the company added two new commercial projects, Chengdu Fanyue Mall and Xiangyang Yuexing Home. The company adopts a unified business model of after-sales and leasing, taking into account the balance of long-term and short-term cash flow while giving full play to the company's commercial real estate operation advantages. With the investment of power construction real estate, the majority shareholders' financial support is expected to gradually increase the self-ownership ratio of the company's high-quality properties. At the same time, in terms of urban layout, the company is deeply involved in the Wuhan region while also increasing its expansion efforts in first-tier cities and key priority cities. Following winning the Nanjing China Storage Project in 2015, in May of this year, the company successfully won a plot for a fan base project in Qinhuai District of Nanjing. The company's name was changed from “Wuhan Nanguo Real Estate Co., Ltd.” to “Nanguo Real Estate Co., Ltd.” during the reporting period, which also reflects the company's determination to develop strategically across regions and countries in the future. Strengthen the integration of shareholders' resources and lay out cultural and creative industrial parks: During the period, the company actively promoted cooperation with China Power Construction member enterprises and strengthened the use of internal land resources. The company signed a “Memorandum of Cooperation” with Hubei Electric Power Construction No. 1 Engineering Company. The two sides reached a cooperation agreement on renovating and utilizing the resources of the old plant owned by the Electric Power Construction Company to build an industrial park for cultural creativity and innovative industries. Previously, the company has signed a cooperation agreement with Chinese and Indian Culture. In the future, the South will provide operating capacity, China and India will provide creative design, and China Power Construction will provide land resources such as plants, etc., and the model of joint construction of a cultural industrial park is worth looking forward to. The PPP expansion model is worth looking forward to. The value of the real estate platform is highlighted in the context of the integration of central enterprises: after Dianjian Real Estate became a real estate listing platform under central enterprises at the end of 2012, the company Huaju became a real estate listing platform under central enterprises. China Power Construction has a large number of urban infrastructure projects across the country. Relying on China Power Construction's urban rail transit PPP projects in the future, it is worth looking forward to promoting the business layout of major urban transportation nodes. At the same time, the acquisition of CITIC Real Estate from CNOOC, the merger of China Metallurgical and Minmetals, the overall listing of China Metallurgical and Minmetals, the overall listing of China Merchants Shekou, and the seizure of “land kings” by central enterprises everywhere can all be seen in the intense competition for integration between central enterprises. The company's majority shareholder, Dianjian Real Estate, has a sales scale of only 20 billion dollars. It is a small scale among central housing enterprises. Recently, the Power Construction Jinmao Consortium won the top price of Hexi in Nanjing with 3.4 billion dollars, which also reflects the large-scale intentions of Power Construction. As the company's only real estate listing platform under the power construction, there is room for imagination in terms of asset integration and capital operation in the context of central enterprise integration. Maintain a “Recommended” rating. The company completed a fixed increase in the second quarter. According to the latest share capital increase after the fixed increase, the company's EPS for 2016-2017 is expected to be 0.22 yuan and 0.32 yuan respectively, and the current stock price corresponding to PE is 27.3 times and 18.5 times, respectively. The company's main real estate business benefits from the recovery of the Wuhan regional property market and is actively exploring the layout of cultural and creative industries; relying on the resources of the majority shareholder Power Construction Group, the PPP expansion model is worth looking forward to; at the same time, in the context of central enterprise integration, as the only real estate listing platform in the power construction department, there is a lot of room for imagination in asset integration and capital operation, maintaining a “recommended” rating. Risk warning: Performance and sales volume fell short of expectations; cultural industry expansion fell short of expectations.