Incident description Shibei Hi-Tech released its 2016 quarterly report. During the reporting period, the company achieved operating income of 244 million yuan, an increase of 525% over the previous year, attributable net profit of 23 million yuan, loss of 12 million yuan and EPS of 0.03 yuan in the same period last year. Incident review revenue and gross margin went hand in hand, and performance reversed losses drastically. Benefiting from sales of the Shibei Xinxin New Development Project entering the settlement period, the company's revenue in the first quarter was 244 million yuan, a sharp increase of 525%, and gross margin was as high as 37.91%, an increase of 16.92 percentage points over the previous year, or mainly due to the 54.60% increase in housing prices in Shanghai in the first quarter. The superimposed expense ratio decreased by 30.92 percentage points, and the company's net profit for the first quarter reversed its losses year over year. Land reserves are sufficient, and performance can be expected. On February 4, the company successfully won the Yonghe Community plot in Zhabei District, Shanghai, with a total land area of 42,600 square meters and a planned construction area of 106,500 square meters. At the same time, it also obtained 30% interest in plot 03-04 on the west side of Shengli Road, Yingpu Street, Qingpu District, Shanghai through capital increases and stock expansion. Combined with the 4 new plots added last year, the company currently has abundant land reserves, and sufficient supply for sale in the future, and promising future performance. Inject high-quality assets to promote park development. In October 2015, the company issued a fixed increase plan to raise no more than 2.7 billion yuan to purchase 49% of Xinyun Investment's shares held by Shibei Group and the development and operation of the Shibei One Center project (14-06 plot). The project is located in the central urban area of Shanghai, with a total construction area of 209,600 square meters. It is close to industrial parks and universities, has convenient transportation, and has a lot of room for appreciation. This fixed increase will help the company further build a service platform for entrepreneurship and innovation, integrate park assets, and enhance the company's profitability and overall competitiveness. The venture capital incubation industry is progressing steadily. Under favorable conditions for Shanghai to actively build a science and innovation center and “remove two and build one” in Jing'an, Zhabei, the company will rely on the industrial advantages and rich enterprise resources of the Shibei High-tech Park to increase industrial investment incubation efforts and build an investment system for the entire life cycle of “original stock investment - angel investment - venture capital - equity investment” enterprises. By the end of 2015, the company's Juneng Bay incubated 119 nursery projects, 190 incubator companies, and 38 accelerator companies, a significant increase from 2014. At the same time, Juneng Bay has also signed investment agreements with 37 start-ups through original stock investment, which strongly guarantees the company's later equity investment. Investment rating: It is estimated that the company's 2016-2017 EPS will be 0.20 and 0.25 yuan respectively, and corresponding PE will be 132 and 108 times, respectively, giving it a “buy” rating. Risk warning: Project sales fall short of expectations.