Event: Company announcement Earnings forecast for the first three quarters: Net profit attributable to shareholders of listed companies reached 645.04 million yuan - 88.01 million yuan, a year-on-year decrease of 25%-45%. The company reached a financial strategic cooperation agreement with Zhongyuan Real Estate: the cities of Shanghai and Nanjing are used as pilot projects to provide buyers with financial services covering the fields of new homes and second-hand housing, and financial products with a maximum period of 36 months and a minimum annual interest rate of 7% for buyers. Comment: Performance is greatly affected by non-recurring profit and loss. The decline in the fourth quarter will narrow the company's overall net profit decline of 40 million in the first three quarters. Among them, it is greatly affected by income tax rate adjustments (parent company's high-tech enterprise qualification reapplication, temporary charge of 25%), accrual of employee planning expenses, and reduction in financial subsidies, which have a total impact of about 30 million. We judge that the remaining 10 million is due to investment in new businesses such as renovation treasures and home loans. The company's traditional main business should not have declined. Looking at the whole year, we believe that the impact of various non-recurring profits and losses in the fourth quarter will weaken, and the decline will narrow throughout the year. The O2O business model has changed, and the input-output ratio has increased. Most domestic companies that do Internet finance and building materials and home O2O have formed Red Sea competition on the C side, and risk control and investment have not been well balanced. The company is actively changing its approach to capture C-side users through B-side cooperation with developers, sales intermediaries, etc. For example, the off-plan housing project that the company cooperates with a developer in Xi'an provides 700 decoration requirements. The B-side cooperation currently being discussed is expected to have accumulated tens of thousands of volumes. Considering mainly off-plan housing, it is expected that centralized distribution will begin in two years. The same is true of the financial business. Providing targeted financial service solutions for B-side partners can increase volume quickly while also being strengthened with the other party's sales system. Liquidity brought about by a strong systematic sales system is the core guarantee of risk control. Therefore, we believe that the financial and O2O business of the 365 Network is relatively less risky, faster in terms of business models, and is progressing more clearly. Cooperation with real estate in the Central Plains opens up space for financial business development. Financial business is undoubtedly the biggest monetization channel for the industry. We have discussed many times before in our special reports on the Industrial Internet and Industrial Finance that the pillar industries of commodities, automobiles, real estate, building materials, and home improvement are the fields where finance exerts the greatest value. In particular, these fields have strong financial attributes and are capital-intensive. In the transaction process, in addition to the coverage of its own sales system, the company also recently reached a strategic cooperation with Zhongyuan Real Estate to provide a full range of financial services for housing transactions under Zhongyuan Real Estate. Zhongyuan Real Estate is currently one of the largest real estate intermediaries. The transactions in 2013 exceeded 500 billion yuan, the transaction volume in 2014 was 650 billion yuan, and the total transaction volume in the first half of 2015 had already exceeded 437 billion yuan. This cooperation is being piloted by Shanghai and Nanjing. We expect Shanghai and Nanjing to account for about 40% of the Central Plains Group's transactions, while the Central Plains alone has second-hand housing transactions of about 10 billion dollars per month in Shanghai. The financial business of 365 Network has run through the entire real estate industry. In addition to financial services in the housing transaction process, the company also provides financial services in the front-end development loans and back-end decoration process. Compared with the World Federation Bank's new housing loans, there is more demand for second-hand housing finance services, such as mortgage advances, entrustment loans, and tenant advances. The average cycle is 2-3 months. Financial services related to second-hand housing in Shanghai, monthly interest+management fees for corporate finance services, annualized yield is close to 20 points, deducted costs (P2P/microfinance) interest spreads of more than 10 points, and are relatively close to the financial business situation of companies (World Union Bank and chain companies). The cooperation between the company and the Central Plains is being piloted in Shanghai and Nanjing. If the key cities of the Central Plains Group are fully rolled out later, such as Shenzhen, Chongqing, and Chengdu, it will provide more room for profit. Maintaining the buying rating We expect the company's fully diluted earnings per share from 2015 to 2017 to be 1.26 yuan, 2.17 yuan, and 3.48 yuan respectively, corresponding to PE 74.5 times, 43.2 times, and 27.0 times, respectively, maintaining the buying rating. Risks suggest that the relevant financial licenses were obtained more slowly than expected; investment in cultivating new businesses was too high, so this year's performance fell short of expectations, etc.