Performance Overview: In the first half of 2013, the company achieved operating income of 356 million yuan, a year-on-year increase of 249.97%; operating profit of 142.77 million yuan, a year-on-year increase of 1904.12%; net profit attributable to parent company owners of 100.53 million yuan, a year-on-year increase of 29810.97%; and basic earnings per share of 0.183 yuan. Fundamental description. The company is a government financing platform specially set up by the Tieling Municipal Government for the development of Tieling New Town, and is mainly responsible for first-level land development. Tieling New Town has an area of about 22 square kilometers. The functional positioning is the administrative center of Tieling City and Tieling County, the tourism, leisure and vacation center of the Shenyang Economic Zone. It provides large-scale, modern and suitable living service support areas for the population of more than 7 million people in Shenyang, the special vehicle production base in the Shentie Industrial Corridor, the Northeast Logistics City, the North China Financial Backstage Service Base, and the Liaoning Vocational Education Base. Strong efforts in the land development business have boosted impressive performance. Looking back at the first quarter, the reasons for the loss in the company's net profit are: 1. Due to the special climatic characteristics of the Northeast region, the company's land sales volume fluctuated greatly with the seasons. Most of the sales were concentrated in the second half of the year, and there were no land transactions in the first quarter; 2. The utility companies under the company depreciated heavily. The sharp increase in the company's performance in the first half of the year was mainly due to an increase in first-level land development revenue during the reporting period compared to the same period last year. Data show that during the period, the company achieved first-level land development revenue of 350 million yuan, an increase of 267.2% over the previous year, and gross margin reached 58.36%. The period expenses were well controlled. The company's expenses during the period were 16.11%, down 24.88 percentage points from the previous year. Among them, the sales expense ratio was 1.86%, down 0.3 percentage points from the previous year; the management expense ratio was 7.52%, down 10.81 percentage points from the previous year; and the financial expenses ratio was 6.73%, down 13.77 percentage points from the previous year. Future growth remains to be seen. The company once stated that with the official opening of the Harbin Railway, the high-speed railway station (Tieling West Railway Station) will officially settle in Tieling New Town, and the company will usher in a rare development opportunity as a first-level land developer; and the entry of domestic first-tier brand developers into Tieling New Town will also bring a lot of premium room to the market. However, judging from the current market performance, the opening of the high-speed rail has not had a significant effect on raising housing prices, and there are related situations such as insufficient actual demand for local real estate and lack of commercial support, so whether the company can maintain high growth in the future is yet to be tested. Efforts are still needed to meet the 2013 profit promises. The company's predecessor was Zhonghui Pharmaceutical. After the restructuring, Tieling Financial Asset Management Co., Ltd. held 189 million shares (34.37% of shares). According to the promises of Tieling Finance and other shareholders, the company's net profit for 2013 should not be less than 739 million yuan. Considering the net profit of 101 million yuan in the first half of the year, this means that the company still needs to achieve 638 million yuan in the second half of the year. We expect the company's earnings per share for 2013-2014 to be 1.35 yuan and 1.02 yuan respectively. Based on the closing price on August 1, 2013, the corresponding dynamic price-earnings ratio is 7 times and 9 times, respectively. Considering that the company is a comprehensive urban operator with a state-owned background and benefits from rural urbanization, it maintains an investment rating of “increased holdings.” Risk warning: In the period of real estate regulation, poor project sales led to a decrease in revenue; local government expenditure pressure was high, and there was uncertainty about project settlement and repayment.