On April 9, 2014, the company announced the status of property resource reserves in the China (Shanghai) Pilot Free Trade Zone. Investment advice: Under Premier ****'s “opening up forces reform,” Waigaoqiao and even joint stock companies are expected to become important global strategic core platform companies. At present, the construction of a free trade zone has been elevated to the height of a national strategy, and the company's Waigaoqiao fundamentals will enter a disruptive reversal stage. In the next three years, the company will focus on developing the first phase of the free trade zone project, which includes the port area, the logistics area, and the international community in central and southern Senlan to achieve “integration of industry and city”. Currently, the total amount of the company's reserve projects is 752 square meters (worth 31.18 billion yuan). We expect the company's 2013 and 2014 EPS to be 0.54 and 0.73 yuan, respectively. We expect that in the future, the value of the company's assets will significantly benefit from the progress of the Pilot Free Trade Zone, and will benefit from five major benefits: policy dividends, industrial upgrading, land price revaluation, positioning changes, and functional upgrading. Taking into account the increase in land prices, we got the company's RNAV of 37.16 yuan. As of April 8, the company closed at 28.49 yuan, corresponding to PE in 2013 and 2014, 52.46 times and 38.92, respectively. Considering that the Sunland project is at its peak of development, Waigaoqiao will benefit from the construction of the Pilot Free Trade Zone. Targeted financing will speed up the construction of the company's five major platforms. An upward trend in land prices in the free trade zone has already taken shape. Therefore, we have given RNAV, or 37.16 yuan, the company's target price for 6 months, giving the company a “buy” rating. Main analysis: According to the company's announced project reserve estimates in and around the Shanghai Free Trade Zone, the total net equity value of the company's projects is 7.52 million square meters, with a total net equity value of 31.18 billion yuan: We assume that the average price of commercial projects and residential projects in the Shanghai Free Trade Zone is 40,000 yuan/square meter, and that the sales price of industrial plant warehouses in the Shanghai Free Trade Zone is 6,000 yuan/square meter. It can be estimated that the company currently has a total of 7.52 million square meters of project reserves worth 1831.18 billion yuan. In April of this year, the company cooperated with China Merchants Real Estate to develop Sunland Commercial D1-4 and D04-04 projects to accelerate the cultivation of commodity bonded display and trading functions in the Free Trade Zone: In April 2014, the company and China Merchants Real Estate signed “About Sunland? “Cooperation Agreement for the Waigaoqiao D1-4 Plot and D04-04 Plot Projects”. The two partners agreed to jointly fund the establishment of the project company with a registered capital of 30 million yuan. The company holds 40% of the shares and China Merchants Real Estate holds 60% of the shares. After the establishment of the project company, the company commissioned the project company to carry out engineering construction on the D1-4 plot and the D04-04 plot. The D1-4 plot runs west to the green belt on the east side of Zhangyang North Road, the south to Qifan Road, the east to the green belt on the south side of Lansong Road, and the north to the green belt on the south side of Zhouhai Road. The land area is 512,000 square meters, with a comprehensive floor area ratio of 4.0, and land for commercial finance and commercial offices. The D04-04 plot is from Gaoxi Road in the north to the green belt on the north side of Zhouhai Road in the south, Lansong Road in the west, and Gaoheng Road in the east. The land area is 27,900 square meters, a comprehensive floor area ratio of 3.0, and commercial finance and commercial office land. We believe that by introducing cooperative development projects with China Merchants Real Estate Company, the company will help the company shorten the early development cycle of the project, reduce the financial pressure on project development, and accelerate the cultivation of industrial functions in pilot free trade zones such as bonded display and trading centers for imported goods. Residential land prices have risen sharply due to the free trade zone policy, and limiting industrial land in large cities will increase the value of the company's land reserves: On January 13, 2014, according to the Voice of China “News and Newspaper Digest” report, Minister of Land and Resources Jiang Daming said, “The central government requires that the development of the three major urban agglomerations in the east should focus on revitalizing land stocks, so starting this year, the supply of new construction land in the eastern region will be gradually reduced. Other than residential land, in principle, no additional construction land will be arranged for megacities with a population of 5 million or more. ” This shows that in the future, approval of industrial land in Shanghai will be strictly controlled, and the price of industrial land will also face the possibility of a further increase. Meanwhile, as the Lingang New Area faces the spring breeze of the construction of the Shanghai Free Trade Zone, its land prices have begun to rise sharply. On December 12, 2013, Shentianjian won the H0406 plot in Lingang Wanxiang Community in Pudong, Shanghai with 502 million yuan, a premium of 144.88%. The transaction price was 7371.51 yuan/square meter. However, the rise in land prices in the main urban area of Lingang was even more obvious. In December 2013, the natural person Xiong Xisheng competed for WNW-A1-2 1-2 in the main urban area of Lingang New Town. The floor price once soared to 16,528 yuan/square meter. In December of the same year, the floor price for the WNW-A1-14-2 plot was 14,527 yuan/square meter and the WSW-A1-3-1 plot was 13,978 yuan/square meter. At present, land prices in the Lingang area have risen by an average of about three times. Investment advice: Targeted financing promotes the construction of five major platforms. Under the construction of the Pilot Free Trade Zone, the company is expected to benefit from five major benefits and be given an “increase in wealth” rating. The company is the only listed company that develops the free trade zone, and its important position is self-evident. Under Premier ****'s “opening up forces reform,” Waigaoqiao and even Joint Stock Company are expected to become important global strategic core platform companies. At present, the construction of a free trade zone has been elevated to the height of a national strategy, and the company's Waigaoqiao fundamentals will enter a disruptive reversal stage. In the next three years, the company will focus on developing the first phase of the free trade zone project, which includes the port area, the logistics area, and the international community in central and southern Senlan to achieve “integration of industry and city”. Currently, the total amount of the company's reserve projects is 752 square meters (worth 31.18 billion yuan). We expect the company's 2013 and 2014 EPS to be 0.54 and 0.73 yuan, respectively. We expect that in the future, the value of the company's assets will significantly benefit from the progress of the Pilot Free Trade Zone, and will benefit from five major benefits: policy dividends, industrial upgrading, land price revaluation, positioning changes, and functional upgrading. Taking into account the increase in land prices, we got the company's RNAV of 37.16 yuan. As of April 8, the company closed at 28.49 yuan, corresponding to PE in 2013 and 2014, 52.46 times and 38.92, respectively. Considering that the Sunland project is at its peak of development, Waigaoqiao will benefit from the construction of the Pilot Free Trade Zone. Targeted financing will speed up the construction of the company's five major platforms. An upward trend in land prices in the free trade zone has already taken shape. Therefore, we have given RNAV, or 37.16 yuan, the company's target price for 6 months, giving the company a “buy” rating. Risk warning: The industry faces two major risks: interest rate hikes and policy regulation.