Core view: Earnings forecast increase of 185%-215% for the first three quarters: On October 10, the company announced a pre-increase in performance for the first three quarters. In the same period last year, the company's net profit attributable to the parent company was 1,050 billion yuan and EPS was 0.35 yuan. The net profit for the first three quarters of this year is estimated to be 2,993 billion yuan to 3,308 million yuan. The sharp increase in performance in the first three quarters was mainly due to the high profits obtained from the sale of some Western Securities and Everbright Bank shares. The merger and separation plan was approved by the State Assets Administration Commission and the shareholders' meeting: The company's merger and separation plan was approved in principle by the State Council's State-owned Assets Administration Commission and the Shanghai State-owned Assets Administration Commission on September 19, reviewed and approved by the Extraordinary General Meeting of Shareholders on the 23rd, and accepted by the Securities Regulatory Commission on the 26th. According to the plan, the exchange price of CITI Holdings is 15.50 yuan/share, and the exchange ratio with Yang Chen B shares is 1:1, the first and second cash option prices of CITI Holdings are all 10.00 yuan/share. As of the 9th, the closing price of CITI Holdings was 13.40 yuan. After the plan is completed, CITI Holdings will divest the environmental protection business and transform into a comprehensive asset management group with urban infrastructure and related fields as the main investment direction. The company will use PPP funds as its main field, and at the same time seek investment opportunities in the industrial chain through PE funds. The company has now cooperated with ICBC and the Stock Exchange to establish 10 billion PPP funds each. In the future, we will invest in urban infrastructure that charges a large amount of fees, including roads, bridges and tunnels, sewage and garbage, underground pipes, etc., and strive to achieve infrastructure charging projects of a certain scale and stable returns through the PPP model. Real estate projects revolve around infrastructure and guaranteed housing projects: the company's real estate projects have two characteristics. One is that the layout is dominated by first-tier cities based on the advantages of infrastructure resources, and the other is the expansion of guaranteed housing and shantytown renovation projects in combination with the pace of shantytown renovation and urban village renovation in Shanghai. According to the company's semi-annual report in the first half of the year, the company completed an area of 105,600 square meters and a construction volume of 700,000 square meters. The expansion of guaranteed housing projects made great progress, and some projects have basically reached resource acquisition intentions. As of the end of the first half of the year, the company's commercial housing area was about 330,000 square meters, advance payments were 5.48 billion yuan (+92.0%), and land storage was about 540,000 square meters. It is located in Zhujiajiao and Xinjiangwan City, Qingpu, and has strong performance lock-up. Outstanding performance in the investment business: The investment business company is carried out by the headquarters and its subsidiary Chengding Fund. The management scale of Chengding Fund has exceeded 30 billion dollars. The investment ideas mainly revolve around the urban infrastructure industry chain. Furthermore, as of the end of the first half of the year, the company held a market value balance of about 15.309 billion yuan in various types of shares. In July, the company participated in the China Railway Construction one-year fixed increase project through an asset management plan. The final issue price was 8 yuan, and the company invested 500 million yuan in subscription. As of the 9th, China Railway Construction's closing price was 14.00 yuan. Maintaining recommended ratings: The company benefits from state-owned enterprise reform and PPP concepts. Based on the company's current environmental protection and real estate business situation, regardless of mergers and separations, we expect the company's EPS for 15-16 to be 1.25 and 1.59 yuan respectively, and PE of 10.75X and 8.43X according to the closing price on the 9th, to maintain the recommended rating. Risk warning: sales fall short of expectations, environmental business progress falls short of expectations, merger and separation matters fall short of expectations.