Incident: Recently, the company received Mr. Cheng Shaoliang, a shareholder, and China Yintai Investment Co., Ltd., a shareholder, respectively. On November 27, 2015, China Yintai completed the registration procedures for business changes relating to the transfer of all of China Yintai's shares indirectly held by Mr. Cheng Shaoliang to others. Mr. Cheng Shaoliang is no longer the final shareholder of China Yintai and has resigned as an executive director of China Yintai. The dissolution of the concerted actor relationship will not cause changes in the controlling shareholders and actual controllers of the company. Main views: 1. The final part of China Yintai's internal equity consolidation process. In December 2014, China Yintai transferred the 66.1799 million shares of Yintai Resources (000975), or 25% of all shares held, to Cheng Shaoliang. The transfer price is about 7.59 yuan/share, which is 50% of the stock price of Yintai Resources; in the first quarter of this year, China Yintai transferred 153.9297 million shares of the Beijing Investment Yintai listed company to Cheng Shaoliang. Accordingly, Cheng Shaoliang became the second largest shareholder and number one natural shareholder of the Beijing Investment Bank 20.78%; On November 27, 2015, China Yintai completed the business change registration procedures relating to the transfer of all of China Yintai's shares indirectly held by Mr. Cheng Shaoliang to others. Mr. Cheng Shaoliang is no longer the final shareholder of China Yintai and has resigned as an executive director of China Yintai. China Yintai and Cheng Shaoliang no longer form a concerted actor. This was already seen in the detailed equity changes announced by China Yintai when the resources were split at the end of 2014. At the time, it was shown that the equity consolidation process would continue in the future, and that Cheng Shaoliang would eventually withdraw from China Yintai and no longer form a co-actor with China Yintai. The November 27 equity transfer only confirmed this news. These three equity transactions form the three steps of China Yintai's internal equity consolidation process. The final chapter has already been revealed — the two former natural person shareholders, Shen Guojun and Cheng Shaoliang, have completed the equity consolidation process for China Yintai. 2. Natural person Cheng Shaoliang's holdings reduction and Beijing Investment Group's holdings increase as a win-win path. Currently, Tokyo Investment Group, the largest shareholder of the company, holds 30.01% of the shares, and Cheng Shaoliang, the second largest shareholder, holds 20.78% of the shares. At the same time, the Beijing Investment Group is unable to achieve absolute control over the company. At the same time, since the actual support for listed companies is not symmetrical between these two major shareholders, this kind of governance structure is not conducive to the long-term development of listed companies. We believe that the successive reduction of Cheng Shaoliang's holdings and the continued increase of the Beijing Investment Group's holdings is the best way to achieve a win-win situation. If the company forms a unique governance structure, it will be more conducive to future capital operation and performance release. The equity structure that may eventually be formed is: Beijing Investment Group holding or absolute holding, and one or more strategic investors participating in the shares. The logic is: Cheng Shaoliang's successive holdings reduction is not disoptimistic about the company's profitability, but rather a sign of abandoning competition for management power. Regardless of whether the Beijing Investment Group increases its holdings or does not increase its holdings, the market's expectations for relative control and absolute management of the Beijing Investment Group will come true, and favorable events such as the company's implementation of refinancing to reduce financial leverage and accept high-quality asset injections can be realized. The market will not be bearish on the company's stocks based on this favorable expectation. On the contrary, it will look at the stock prices of many companies and will accept Cheng Shaoliang's reduced holdings with high enthusiasm. At that time, the possibility of one or more strategic entry investors will not be ruled out. In the process of this change in equity structure, Cheng Shaoliang can maximize his own interests, and the Beijing Investment Group can also achieve absolute control over the company's management decisions, and be more motivated to make listed companies bigger and stronger. 3. Return to Beijing Strategy Guarantee Company Profitability The company's current strategy for a full return to Beijing is a decision made based on its own actual situation. Although the competition in the Beijing market is fierce, and the return to Beijing means higher land costs and financial pressure, the company has a fully differentiated competitive advantage in the Beijing market with its expertise in the rail transit superproperty segment and the resource and financial support of controlling shareholders. At the same time, most of the company's projects in Beijing have been developed in cooperation with leading enterprises in the industry. At the same time, most of the company's projects in Beijing have been developed in cooperation with leading enterprises in the industry. To a certain extent, development risks have been reduced, and it is also beneficial for the company to study the projects of leading enterprises in the industry. Management and operations experience. Therefore, it can be said that the main layout of the company's projects in Beijing will not lead to a decrease in the company's profitability, but it is a reasonable choice to focus on segmenting fields and digging deeper into market segments. Judging from the current distribution and valuation of the company's current sales and unsold projects, the total construction area of the Beijing project is 1.71 million square meters, the average price is 416.19 million yuan/square meters, and the total saleable value of up to 71,168 billion yuan ensures that Beijing becomes the core area of the company's project layout. It is also the implementation of the company's “Beijing-centered, rail-transit based” strategy. 4. The development of Beijing-Tianjin-Hebei rail transit provides strategic opportunities for the company's development. Relying on the upstream advantages of the holding company Tokyo Investment Group in building property development on rail, the company will significantly benefit from the development of rail transit in Beijing and Beijing-Tianjin-Hebei. At the same time, with its own technical advantages and project development experience, the company may also explore more opportunities in the national rail transit development environment. It is estimated that by 2020, the operating mileage of Beijing rail transit will reach about 1000 kilometers, and the new mileage of rail transit in the Beijing-Tianjin-Hebei region will exceed 2,000 kilometers. We estimate that the total superstructure area of Beijing and Beijing-Tianjin-Hebei rail transit will be about 10 million square meters by 2020, of which about 6 million square meters within Beijing and 4 million square meters outside Beijing. The company has a strong advantage and is expected to obtain a share of 8 million square meters, and reserves will more than double. Conclusion: The group company's “track+land” vehicle comprehensive development model has a huge competitive advantage, laying a strong foundation for the company's leading rail property development leader. The exit of China Yintai opens the door to a more clear shareholding structure of the company. Natural person shareholder Cheng Shaoliang has successively reduced his holdings, and Beijing Investment Group has increased its holdings, which will become a win-win way to achieve a win-win situation. We expect the company's operating income from 2015 to 2017 to be 4.530 billion yuan, 6.641 billion yuan and 9.338 billion yuan respectively, net profit of 277 million yuan, 421 million yuan and 590 million yuan respectively; earnings per share of 0.37 yuan, 0.57 yuan and 0.80 yuan, respectively, corresponding PE of 25.48, 16.74 and 11.25 yuan, respectively. Maintain the company's “highly recommended” rating by considering the company's core competitiveness in building properties on rails and the possibility of major shareholders' resource injection as a probable event.