Incident: The company announced a fixed increase plan: it plans to issue shares to CCCC Real Estate Group to purchase 100% of its shares in CCCC Real Estate, 20% of Zhongzhu Zhaojia's shares, Zhongfang Suzhou's 30% shares, Zhongfang Tianjin's 49% shares, Chongqing Jiarun's 30% shares, and Chongqing Jiahui's 30% shares. At the same time, it is planned to raise 4.25 billion dollars in supporting capital by issuing shares from China Communications Group and Wenzhou Dexin. Significant increase in asset strength, additional locking conditions: 1) Significant increase in asset strength: The estimated value of the asset subject to this transaction is 6.43 billion yuan, and the estimated value-added rate is 28%, which is 376% of the company's net assets at the end of 2015. The net equity profit scale of the underlying assets in 2015 was about 130 million yuan (net profit before restructuring was only 0.3 billion yuan), and equity revenue was 160 million yuan. 2) Raising supporting capital: In addition, it is proposed to raise 4.25 billion dollars in supporting capital for project investment and debt repayment, and the company's operating capacity will be significantly improved. After the fixed increase is completed, the company's share capital will increase from 297 million shares to 1,176 million shares, and the actual controller of the company remains unchanged; 3) Additional locking conditions: After the transaction is completed, in addition to the 36-month lockdown period, the majority shareholders have an additional commitment to automatically extend the lockdown period for 6 months if the company's closing price for 20 consecutive trading days falls below the issue price or if the closing price at the end of the six-month period falls below the issue price for 6 months. Abundant in vitro resources and continuous injection can be expected: 1) The beginning of the major integration of the three major platforms of CCCC: As stated in our previous report, CCCC Group currently owns the three major real estate platform companies of China Real Estate, CCCC Real Estate, and Greentown Real Estate, and is currently kicking off a major integration with the domestic real estate platform to CCCC Real Estate; 2) The Group's only real estate business platform: After this transaction, China Communications Group promises that the company will be the only domestic real estate business development platform in the future except Greentown China. The rest of the real estate business under CCCC will be injected with complementary advantages 3) After the company is integrated, there will be two listings at home and abroad at the same time The platform, even if the two places are not integrated in the short term, China Communications's land resources and Greentown's commercial operation capabilities complement each other very well, and will push the company to the next level. Central real estate enterprises set sail, benefiting from the small-cycle recovery of real estate: 1) The company will mainly lay out the second tier and the high-quality third tier: after the company restructuring is completed, the land reserve scale is expected to exceed 5 million square meters, and resource endowments will increase significantly; 2) Short-term benefit cycle recovery: The company's 2016 quarterly report shows revenue of 164 million yuan, an increase of 80.45% over the previous year, and is expected to achieve a contracted sales area of 710,000 square meters. The contract sales amount is 827 million yuan, up 243% and 493%, respectively. The company's settlement revenue this year exceeds 243% and 493%, respectively. Expectations. Investment suggestions: The company's fixed growth plan has been implemented, China Communications's real estate platform integration has begun, and the company's assets and resource endowments have increased dramatically, while benefiting from short-term real estate recovery. The company's sales in the first quarter increased dramatically, and the annual settlement revenue is expected to reach a higher level. Without considering restructuring, we expect the company's EPS in 16-18 to be 0.14, 0.16, and 0.19, respectively. The company's stock price PE multiples corresponding to the suspension period are 97.8X, 87.9X, and 72.6X; the company is a rare real estate with state-owned capital reform endowments, and deep group resources integration Transform The catalytic effect is expected to continue. We will maintain our “buy-A” rating and target price of 17.6 yuan. Risk warning: Real estate business does not increase revenue and profit over a long period of time, plan approval cycle is too long, etc.