Events: The company announced its 2015 annual report, achieving revenue of 4,013 billion yuan, a year-on-year increase of 1.66% (previous value of 33.29%); realized net profit attributable to shareholders of the parent company of 279 million yuan, a year-on-year decrease of 36.78% (previous value of 37.79%); and earnings per share of 0.26 yuan, a year-on-year decrease of 51.85%. The decline in performance and the deep cultivation of Yunnan have seen results: the real estate business achieved operating income of 2,552 billion yuan in 2015, a decrease of 22.33% over the previous year. Among them, residential revenue was 1,502 billion yuan, an increase of 22.73% over the previous year. The company achieved real estate revenue of 2.145 billion yuan in Yunnan, accounting for 84.03% of total real estate revenue, indicating that the company's deep cultivation in Yunnan has achieved results. The decline in performance was mainly due to market factors, with sales revenue lower than the same period last year and changes in the real estate sales structure. With the government background and project reserves, don't worry: throughout the year, the company achieved a sales contract value of 3,991 billion yuan, a completed area of 1,422,700 square meters, and a construction area of 903,000 square meters under construction. During the reporting period, the company and CITI jointly set up a land storage company; they intend to acquire 5% of Guancheng Kaigai's shares and hold 100% of Guanchengkai's shares after the acquisition, which will help the company's land storage and project development in the future. The company actively promoted existing real estate development projects, and completed an investment of 3.702 billion yuan during the reporting period, of which 2,617 billion yuan was invested in projects under construction and 1,085 billion yuan was invested in additional projects. Profits have declined, and multi-faceted financing can be expected: the company's average ROE during the reporting period was 6.70%, down 4.42pc from last year; net sales profit margin was 5.27%, down 7.31pc from last year; growth and profitability declined markedly. In terms of liabilities, the company's balance ratio after excluding advance payments was 80.4%, down 1.6pc from the same period last year. The company has taken advantage of financing, and the capital situation has improved compared to the same period last year. Currently, the company plans to transfer 60% of Shengfa Real Estate's shares and Yuncheng Liangshan's 690 million yuan bond, which will help return capital and increase cash flow in the future. Actively integrated into the “Belt and Road”, tourist real estate is impressive: Benefiting from favorable policies such as the “Belt and Road”, the “South of Colorful Clouds” will shine again. Relying on the advantages of rich real estate resources and supporting resources, the “tourist real estate, urban complex, and old-age real estate” product line strategy is laid out. The company makes full use of its location advantages and plans to jointly fund the establishment of a project company with Hong Kong Investment Corporation, Runde Funing, and Tianzheng Investment to gradually launch a comprehensive tourism real estate project on the Lancang-Mekong River. Investment advice: The company's performance declined due to regional market factors. However, the funding side has improved, and multi-faceted financing can be expected. Relying on the government background, there is no need to worry about project reserves. The company has a clear strategy, is deeply involved in Yunnan, actively integrates into the “Belt and Road”, and develops tourist real estate and urban operations. Future profits can be expected. We expect the company's 2016-2018 EPS to be 0.30, 0.36, and 0.45, with PE valuations corresponding to the current stock price of 16.3X, 13.9X, and 11.0X, maintaining a “buy-A” rating, with a target price of 7.54 yuan for 6 months. Risk warning: declining performance, transformation falling short of expectations