The decline in carry-over projects dragged down performance: The company released its semi-annual report on August 25. The company's total operating income for the first half of the year was 282 million yuan, a year-on-year decrease of 57.92%, net profit attributable to the parent company - 144 million yuan, 889.182 million yuan for the same period last year, and a gross profit margin of 40.75%, which is basically the same as 40.62% in the same period last year. The change in performance from positive to negative is mainly due to the company's few carry-over projects in the first half of the year. Considering that the company is currently participating in a total of 29 holding projects, with a planned land use scale of nearly 26,000 mu, and a total planned construction area of about 12.37 million square meters, the carry-over scale increased in the second half of the year, performance is expected to improve. Most of the company's current projects are in second-tier and third-tier cities. Affected by the general economic environment and regional market environment, sales in the first half of the year were 393 million, which fell short of expectations. The net debt ratio has risen: at the end of the first half of the year, the company's net debt ratio climbed to a high of 422.78%, long-term debt of 17.766 billion yuan, non-current debt of 5.784 billion yuan, and monetary capital of only 4.21 billion yuan. The company is facing some pressure on cash flow, mainly because the company is currently in a period of transition and increased investment. In April, the company announced that it plans to issue 3 billion yuan of corporate bonds, and in June it obtained a loan of 1 billion yuan from Cinda Asset Management. The fixed increase work continues to advance, and the pressure on cash flow is expected to ease. The increase in the group's holdings shows confidence, and the injection of high-quality resources is worth looking forward to: following a fixed increase of 1.5 billion yuan by the provincial city investment group at the end of last year, the company announced on July 7 that the group increased its holdings by 1.605%, showing confidence by increasing its holdings twice. The Group has a series of high-quality resources such as tourism, medical care, education, hotels, and Internet finance, with total assets reaching 90 billion yuan. It has 80% of Yunnan's scenic spots and half of Xishuangbanna's scenic resources. In the future, the Group will build an urban complex platform for collaborative development of big leisure+big construction. As the group's only listed company in mainland China, the company is expected to receive the injection of high-quality resources from the group, providing a strong guarantee for the company's future industrial upgrading and transformation. The company acquires shares in Benyuan Payment, a subsidiary of the group: On July 13, the company announced that the group plans to transfer 35% of the shares of Yunnan Benyuan Payment Management Co., Ltd., which has obtained the “Third Party Payment Business License” and “Internet Payment License”, to the company. The layout of Internet finance can not only bring new profit growth points, but also provide financial elements for the company to build a business model linked to residential complexes, pension real estate, and tourist real estate. Later, it is possible to achieve business collaboration with community O2O platforms. Yunnan's strategic value has increased, and the company has clearly benefited: on July 23, the State Council approved the establishment of a cross-border cooperation zone in Xishuangbanna, Yunnan, and on June 16, Kunming declared a free trade zone in the institutional reform plan. This will all help Yunnan become a radiation center for South Asia and Southeast Asia, an important fulcrum of the “Belt and Road” and Yangtze River Economic Belt strategies, and the “central processor” driving the integrated development of the central Yunnan urban economic circle. Companies that have mastered a large amount of Yunnan tourism and real estate resources will become direct beneficiaries. Maintaining the recommended rating: The company's 2015-2017 EPS is predicted to be 0.70, 0.82, and 1.03 yuan respectively, corresponding to the current stock price of only 8.5 times PE, maintaining the recommended rating. Risk warning: The progress of state-owned enterprise reform is lower than expected, and the pace of inventory turnover is slowly increasing.