Real estate and garden prosperity declined in 2015, leading to a sharp decline in performance. The company announced its 2015 annual report on the evening of April 19, 2016. In 2015, the company achieved operating income of 2,433 billion yuan, YOY -23.04%; net profit attributable to shareholders of listed companies of 199 million yuan, YOY -49.88%; and earnings per share of 0.12 yuan and YOY -57.14%. The company's landscape engineering accounted for the largest share, reaching 87.37%, achieving revenue of 2.125 billion yuan and YOY -27.66%. Furthermore, the gross margin of the project was reduced by 6.26pct to 18.39%. The decline in revenue and profitability has led to a decline in performance, and the real reason behind the decline in real estate and garden prosperity in 2015 is the real reason behind it. Dragged down by the engineering business, profitability declined significantly. Operating cash flow needed to be improved. The company's gross profit margin in 2015 was 20.84%, down 5.29pct from the previous year, mainly due to the landscape engineering business. The net profit margin was 8.19%, down 4.39pct year on year. This is mainly due to increased competition in the garden industry and the downturn in the real estate industry, and the gross margin of some newly signed projects has declined. The fee rate for the period was 9.22%, an increase of 1.59pct over the previous year. The sales expense ratio increased from 0 to 0.13%, mainly due to sales expenses generated by Deep Blue Environmental Protection. The management fee rate and financial expense ratio increased by 1.34 pct and 0.12 pct respectively, mainly related to the reduction in revenue scale. The company's net operating cash in 2015 was -401 million yuan, which continued to deteriorate from -167 million yuan in 2014. Mainly, the real estate regulation policy continued, and the overall capital return of the landscape construction industry was affected. With the vigorous implementation of the PPP model, the company's operating cash situation is expected to improve in the future. The recovery in real estate led to steady growth in the main garden industry in the first quarter of 2016, YOY +6.2% in real estate development investment, +19.2% in new construction, and YOY +33.1% in real estate sales. Real estate has entered a small recovery cycle, and the progress and extent of recovery have exceeded market expectations. The correlation between the company's real estate and garden business and real estate sales is high. The recovery in real estate sales will promote the steady growth of the company's garden construction business. Deep Blue Environmental Protection and Fengcai Ecology have increased their performance significantly. Deep Blue Environmental's net profit in 2015 was combined at 27.77 million yuan, achieving 32.54 million yuan for the whole year, fulfilling its commitment of 32 million yuan. Its promised net profit for 2016-18 was 4640/6728/90.82 million yuan. As Deep Blue Environmental enters the financing platform for listed companies, we believe there is a high probability that the environmental protection business will fulfill its net profit commitment in the next few years. Fengcai Ecology is a high-tech agricultural enterprise integrating the cultivation, planting, sales, development of new varieties, and the construction and operation of a four-season colorful ecological tourism park. The company holds 7.25% of its shares. Investment income of 11.66 million yuan has been confirmed in 2015. We expect the corresponding investment income to exceed 100 million yuan in 2016. The valuation is in line with the industry average. Maintaining the “buy” rating, we forecast the company's 2016-18 EPS of 0.20/0.23/0.25 yuan, YOY +68%/17%/9%, and CAGR 29%. Taking into account the industry valuation and the growth rate of the company's performance, we gave the company 40 to 45 times PE for 16 years, a reasonable valuation range of 8-9 yuan, and maintained a “buy” rating. Risk warning: Sales in the real estate market are sluggish, and the progress of Sante Cableway's acquisition of Fengcai Ecology is lower than expected