Investment Overview In the 2013 fiscal year, the contract sales value of Ruian Real Estate (including the Dalian Joint Venture) totaled RMB 16.6 billion, with a 190% increase in 2012. The sales area is 622,000 square meters, and the average sales price is RMB 26,700 per square meter. Among them, the total contract sales value of general properties (including the Dalian Joint Venture) was RMB 9.9 billion, up 78% from RMB 5.56 billion in 2012. The sales area was 423,000 square meters, up 63% from 260,000 square meters in 2012. Due to changes in the sales union structure, the average selling price was RMB 23,400 per square meter, up 9% year on year. In addition, the overall sales of the two commercial properties brought the company 6.7 billion yuan, accounting for 40% of the total sales value, which is an important source of sales value. These two properties are divided into Shanghai Taipingqiao Enterprise World No. 5 and Chongqing Tiandi Enterprise World No. 2. Office and retail use, with a total construction area of 198,000 square meters. Overall, the sales volume of Ryan Real Estate in 2013 exceeded expectations, and the sales volume of 6.7 billion dollars of the two integrated properties significantly increased the sales volume. Although this is due to non-regular sales growth, it has positive significance in improving financial liquidity and turnover levels. In 2013, the core net profit of Ryan Real Estate reached 1.18 billion yuan, a sharp increase of 438% from 220 million in 2012. The significant increase in income from accounts and the increase in fair return on investment were the main reasons. During the period, the company recorded operating revenue of 9.83 billion yuan, an increase of 104% over the previous year. During the period, confirmed revenue from property sales increased 136% to RMB 8.36 billion, with a total area of 5020,000 square meters. Chongqing Tiandi's contribution is outstanding, with a cumulative revenue of RMB 3.08 billion, which has a certain impact on average sales prices and product combinations. The gross margin fell to 32% due to the higher proportion of projects with lower gross margins. During the period, the company's rent and related revenue increased 15% from RMB 1.25 billion in 2012 to $1,440 billion, of which 1.15 billion came from investment property rent, an increase of 9% over the previous year, and hotel operating revenue of 290 million yuan. The increase in revenue was mainly due to additional revenue contributed by Shanghai Ruian Plaza and Xintiandi Langting Hotel, as well as rent increases. Since the planned spin-off of its Xintiandi listing in 2012, Ryan Real Estate has continued to reorganize its property partnerships. According to its vision, Ruian Real Estate will become a developer focusing on the development and sale of residential and commercial properties to accelerate group asset turnover, while China Xintiandi will become the owner, operator and manager of its commercial real estate. This new business structure will help Ruian Real Estate and China Xintiandi focus on their independent and unique core business, and more importantly, it will help release the company's value and increase its share value. As of December 31, 2013, the total cash and bank deposits of Ruian Real Estate were RMB 10.18 billion. Net debt decreased by 1.1 billion to 24.92 billion from the end of 2012, and the net debt ratio fell 10.8 percentage points to 59.1% from the end of 2012. It can be seen that Ryan's real estate management deliberately optimized the financial situation in 2013, and both short-term debt and long-term debt were reduced. Increased sales and multiple financing activities have positive implications for financial liquidity and debt adjustment. We believe that Ryan Real Estate's 2013 performance slightly exceeded expectations, and that adjustments and restructuring of the company's property associations in business activities increased the company's value, even though it was not reflected in the stock price. We believe that the company's business activities in 2014 will still focus on improving sales and restructuring property associations, with few bright expectations, and that the completion of the Xintiandi spin-off listing and business restructuring in 2015 will be a catalyst for stock prices. We gave Ruian Real Estate an “increase in holdings” rating, with a target price of HK$2.2 for 12 months, which is equivalent to 3.3 times the expected price-earnings ratio for 2014. Contract sales surged 190% in fiscal year 2013. In fiscal year 2013, the total contract sales value of Ruian Real Estate (including the Dalian Joint Venture) was RMB 16.6 billion, up 190% in 2012. The sales area is 622,000 square meters, and the average sales price is RMB 26,700 per square meter. Among them, the total contract sales value of general properties (including the Dalian Joint Venture) was RMB 9.9 billion, up 78% from RMB 5.56 billion in 2012. The sales area was 423,000 square meters, up 63% from 260,000 square meters in 2012. Due to changes in the sales union structure, the average selling price was RMB 23,400 per square meter, up 9% year on year. In addition, the overall sales of the two commercial properties brought the company 6.7 billion yuan, accounting for 40% of the total sales value, which is an important source of sales value. These two properties are divided into Shanghai Taipingqiao Enterprise World No. 5 and Chongqing Tiandi Enterprise World No. 2. Office and retail use, with a total construction area of 198,000 square meters. At the end of 2012, the company's approved purchase amount was 1,570 million yuan, with an authorized purchase area of 51,500 square meters. In the first two months of 2014, Ryan Real Estate had a contracted sales amount of 1.2 billion dollars. Overall, the sales volume of Ryan Real Estate in 2013 exceeded expectations, and the sales volume of 6.7 billion dollars of the two integrated properties significantly increased the sales volume. Although this is due to non-regular sales growth, it has positive significance in improving financial liquidity and turnover levels. Core profit increased significantly in fiscal year 2013. In 2013, Ruian Real Estate's core net profit reached 1.18 billion yuan, a sharp increase of 438% from 220 million in 2012. The significant increase in income from accounts and the increase in fair income from investment properties were the main reasons. During the period, the company recorded operating revenue of 9.83 billion yuan, an increase of 104% over the previous year. During the period, confirmed revenue from property sales increased 136% to RMB 8.36 billion, with a total area of 5020,000 square meters. Chongqing Tiandi's contribution is outstanding, with a cumulative revenue of RMB 3.08 billion, which has a certain impact on average sales prices and product combinations. The gross margin fell to 32% due to the higher proportion of projects with lower gross margins. During the period, the company's rent and related revenue increased 15% from RMB 1.25 billion in 2012 to $1,440 billion, of which 1.15 billion came from investment property rent, an increase of 9% over the previous year, and hotel operating revenue of 290 million yuan. The increase in revenue was mainly due to additional revenue contributed by Shanghai Ruian Plaza and Xintiandi Langting Hotel, as well as rent increases. By the end of '13, Ruian Real Estate had completed investment properties with a construction area of 846,000 square meters and a net value of RMB 29.2 billion. Shanghai, Wuhan, Chongqing, and Foshan accounted for 75%, 4%, 14%, and 7% of the book value. As of the end of 2013, the company's investment property area under construction was 783,000 square meters, with a book value of 10.6 billion yuan.