Be a virtual group and strengthen the listed company. The relevant measures are a major implementation under the premise of the overall deployment of the state-owned enterprise reform plan in the Pudong New area, and the major breakthroughs in personnel structure adjustment and asset management mode will lay the groundwork for the establishment of a more modern enterprise management system in the later stage. it is expected to become one of the classic cases of state-owned assets reform in Shanghai in the later period.

Asset integration and trusteeship to maximize the platform effect of listed companies. The bill will purchase all the original group assets (automobile trading market, international cultural investment in the free trade zone, Gaoqiao logistics center) or trusteeship (involving land, finance, cultural industries and other enterprises with a net asset scale of nearly 13.5 billion) to listed companies to solve the problem of inter-industry competition and enhance the strength of listed companies at the same time. The company is entrusted to manage the unlisted equity assets of the controlling shareholders, which is conducive to the formation of effective interaction and integration with listed assets, and to give full play to the overall platform effect and advantages of the group. In addition, it will also help to form a potential profit growth point for the company.

Group leaders all sink listed companies, unifying strength and interests at all levels. According to the announcement of the listed company, the board of directors of Waigaoqiao shares agreed to appoint Liu Hong, Li Yunzhang, Lu Ji, Yao Zhong and Li Wei as deputy general managers of the company. Data show that the above personnel are the leaders of the company group. The bill brings the original group leadership directly into the listed company, and the original leader of the listed company has another appointment. We believe that after this adjustment, all the leaders of the group companies will serve in the listed companies. In addition to reducing the level of examination and approval, it is conducive to unifying the interests of employees at all levels to the level of listed companies, which will open the way for the future to build a clearer power and responsibility system, incentive system and market value assessment system.

Change the fund-raising projects to speed up the efficiency of the use of funds. The company intends to change some of the raised-fund investment projects. The change of the fund-raising project involves a total of 9 projects, and we believe that the change of the fund-raising investment project is in line with the functional development of the free trade zone and the needs of customer training. It is assumed that the internal rate of return of the property construction project involved will change from 10.10% to 9.97%, and the static investment payback period will change from 7.58 years to 7.74 years. On the whole, the economic benefit of the project is good, and there is little change. At the same time, the fund-raising investment project changes will reduce the sale of high-quality properties, long-term income will be improved.

Investment suggestion: Waigaoqiao and even Waigaoqiao Co., Ltd. will become an important global strategic core platform company under Prime Minister Li Keqiang's "opening up and reform". At present, the construction of the free trade zone has become a national strategy, and the fundamentals of the company's Waigaoqiao will enter a substantial reversal stage. In the future, the company will focus on developing the first phase of the free trade zone, including the port area, logistics area, Senlan Middle Block and Southern Block International Community, in order to achieve "production-city integration". Among them, the Senlan project is 1.3 million square meters (785800 square meters has been started so far), which is expected to bring rich returns to the company. We estimate that the company's EPS in 2015 and 2016 will be 0.74 yuan and 0.91 yuan respectively. We expect that the future asset value of the company will significantly benefit from the promotion process of the free trade pilot zone, and will receive five major benefits: policy dividend, industrial upgrading, land price revaluation, positioning change and function upgrading. For this reason, we expect the company to RNAV to 42.72 yuan. As of Aug. 13, the company closed at 30.30 yuan, corresponding to 40.8 times and 33.3 times of PE in 2015 and 2016, respectively. Considering that the company will benefit from the reform of state-owned assets and the construction of the free trade pilot zone in Shanghai, targeted financing will speed up the construction of the company's five major platforms, and taking into account that the average PE of listed companies in the Shanghai Free Trade Zone in 2015 is about 60 times, we use the 2015 PE of 65 times, or 48.1 yuan, as the company's six-month target price to maintain the "overweight" rating.

Risk hint: the recovery in industry fundamentals is not as expected.