Matters: On the evening of January 13, Phoenix Co., Ltd. announced on the evening of January 13 and the Central Shopping Mall (600280) recently signed a framework agreement to form a strategic partnership. According to the agreement, in the urban complex and commercial projects developed by Phoenix Co., Ltd., the central shopping mall will prioritize chain stores under the Central Shopping Mall as the main stores to be launched in the project; the central shopping mall will participate in the commercial project developed by Phoenix Co., Ltd., while at the same time, various cultural consumer brand stores under the Phoenix Group will be prioritized for entry into chain store projects in various regions; the two sides will draw up corresponding cooperation models according to the specific conditions of each project. Comment: The framework agreement has been signed, and will form a strong alliance with central shopping malls to complement each other's strengths. The central shopping mall not only has strong commercial brand resources and shopping mall management experience, but is also a company with Internet thinking and a self-revolutionary spirit, created by a company with an Internet mindset and a self-revolutionary spirit. The Yurun Central Shopping Mall shopping platform was officially launched on November 11, 2013, and the mobile app “Central Mall” was officially launched on iOS and Android platforms on December 28, 2013. However, the actual controller of Phoenix Co., Ltd. is the Jiangsu Provincial People's Government, and the largest shareholder is Jiangsu Phoenix Publishing and Media Group Co., Ltd., and Jiangsu Phoenix Publishing and Media Group Co., Ltd. is also a major shareholder of Phoenix Media (601928). Therefore, Phoenix Co., Ltd. has rich social and cultural resources. We believe that after reaching this strategic cooperation intention, the two sides will form a strong alliance with complementary advantages, which will surely create a new pattern of commercial and cultural real estate. With genetic advantages, the company is already a pioneer in A-share cultural real estate. Due to Phoenix Group's dominant position in the distribution and publishing industry and its unique position within Jiangsu Province, the company has become a pioneer in cultural real estate among A-shares. In the field of real estate development, it focuses on cultural management and cultural consumption, while also promoting the development of surrounding businesses and housing projects. Currently, corporate cultural real estate has two major advantages: ① government orientation brings industry barriers and land acquisition advantages; ② enhances property value through cultural brands. Entering the old-age care industry, with more room for growth, the company announced on October 22, 2013: While steadily promoting cultural real estate, the company is fully aware of the huge demand and opportunities brought to China's pension industry by population aging. In particular, the publication of “Certain Opinions of the State Council on Accelerating the Development of the Elderly Care Service Industry” has laid a solid foundation for the development of the old-age care industry. In order to better implement the company's exploration of the new industrial development direction of the old-age care industry, further integrate cultural, medical, real estate and other resources, and strive to achieve an organic integration of real estate development with the old-age care industry. The company decided to invest 500 million yuan to establish a professional pension industry company dedicated to the research, development, operation and management of the pension industry. The old-age care industry is a special comprehensive industry derived from the primary, secondary, and traditional tertiary industries, covering housing, nursing, medical care, rehabilitation, health, management, cultural and sports activities, catering services, and daily living care. China is experiencing the largest and fastest aging process in history; it is estimated that by the end of the 12th Five-Year Plan period, the elderly population will reach 221 million yuan, accounting for 16% of the country's population; by 2050, the number of elderly people in China will account for 1/3 of the country's total population. According to internationally accepted standards, if the proportion of a country's elderly population aged 60 or over or over 65 in the total population exceeds 10% and 7%, then the country has reached population aging (China has entered an aging society since 2005). In 2010, the total pension for the elderly in China reached 838.3 billion yuan; in 2020, it will reach 2814.5 billion yuan; by 2030, the total pension will reach 7321 billion yuan. Currently, the elderly can spend 400 billion yuan on purchasing products for the elderly. Overall, the elderly in China have become an important consumer group. According to the “12th Five-Year Plan” for the Construction of a Social Elderly Care Service System (2011-2015) issued by the General Office of the State Council, the “90/07/03” model is proposed, that is, 90% of the elderly are home-based pension, 7% are social pension, and 3% are institutional pension. As of 2012, the country had 40,200 pension institutions of various types, with 4.16 million beds, accounting for 2% of the total number of elderly people; the number of elderly people adopted was close to 3.1 million, close to 1.6%, which is far below the average of around 5% in developed countries. Currently, the number of beds per 1,000 elderly people in China is much lower than in developed countries, and it is also at a low level among developing countries. According to the “Certain Opinions of the State Council on Accelerating the Development of the Elderly Care Service Industry”, the number of beds by 2020 will increase by 134% compared to 2012. In 2012, the elderly population was 193 million, and according to 3% institutional pension, 5.79 million beds were required (a gap of 1.63 million). At present, the participation of social capital in the old-age care industry has developed. Among them, old-age real estate, which mainly develops and operates old-age care communities, is the most concentrated. Active investors in this field include: senior nutrition service agencies, real estate developers, insurance companies, overseas investors, etc. As far as real estate for the elderly is concerned, according to statistics, 80 real estate developers across the country have now entered the field of old-age real estate, and more than 100 old-age real estate projects have been publicly disclosed. We believe that real estate for the elderly will develop rapidly. Companies that enter the market early will quickly begin large-scale replication and promotion as their operating models and profit models mature as they accumulate operating experience. The government attaches great importance to the old-age care industry, and policy support is endless. We believe that the government has paid more and more attention to the old-age care industry in recent years. The central government and local authorities have continuously introduced supporting policies to promote the development of old-age real estate to regulate the development of the industry. Recently, they are mainly supported by land, fiscal, and taxation policies. Since 1996 is August, when the National People's Congress passed the “Law of the People's Republic of China on the Protection of the Rights and Interests of the Elderly,” China has successively enacted more than 200 policies and regulations on the elderly, which are numerous and cover a wide range of topics. Since 2011, local pension industry policies and regulations have been introduced frequently. Although China's pension real estate policies and regulations have been intensively introduced in recent years, most of them are programmatic and principle policies, but implementation rules have yet to be further refined if they are to be implemented in practice and have practical operability. Among them, the core supporting policies include the following aspects: 1. Clarify the nature of real estate land for the elderly, and establish a special land use category for “real estate for the elderly”. 2. Include the supply of land for the elderly into the overall urban land use plan and the annual land use plan. 3. According to the operating characteristics of old-age real estate projects, preferential margins are determined according to the operating model in terms of corporate income tax, land use tax, business tax, etc. A pioneer in cultural real estate, a pioneer in the old-age care industry, has been given a “recommended rating”. In summary, we believe that the company is not only a pioneer in cultural real estate, but also an upstart in the old-age care industry. Compared with traditional housing enterprises, the company's strategic layout can not only avoid the ceilings of the traditional housing industry and traditional commercial real estate, but also avoid head-to-head confrontation with major developers in the traditional housing field. We will conduct a further analysis on the broad prospects of the old-age care industry, especially old-age real estate, in subsequent special research reports. The company's 2013-15 EPS is expected to be 0.40/0.70/0.91 yuan respectively, covering the first time and giving it a “recommended” rating.