Company Profile Ruian Real Estate Co., Ltd. was established in 2004 and listed on the Hong Kong Stock Exchange in October 2006 (stock code: 272). It is Ruian Group's real estate flagship company in mainland China. Ruian Real Estate is engaged in residential development, commercial property investment and operation, and hotel management in core cities in mainland China. Currently, the company has eight projects at different development stages in central locations in Shanghai, Wuhan, Chongqing, Foshan and Dalian, and the company's land reserves amount to 13.2 million square meters. “Xintiandi” is a famous commercial real estate brand under the company, and it is also the company's core business. Investment Overview Ryan Real Estate's total revenue in 2012 fell 43% year over year to RMB 4.8 billion, and core net profit plummeted 87% to 210 million yuan. The main reasons for the marked decline in performance include a small delivery area, a 30% drop in account area; and the annual sales value of 5.7 billion dollars is far below the sales target of 12 billion dollars. Regarding weak sales in 2012 under good market conditions, our view is that sales strategies are inflexible, sales structures have changed, and the recovery of high-end properties is limited. In 2012, the company's rent and related revenue increased 47% year over year to RMB 1.25 billion. Among them, rent and related income from investment properties reached 1.06 billion yuan, an increase of 26% year over year. The remaining 190 million revenue came from the hotel business. The Shanghai Taipingqiao office and retail property, which includes Shanghai Xintiandi, Enterprise World Phase 1, and Ruian Plaza, is Ruian Real Estate's best quality investment property. It accounts for only 38% of the total rental area, yet it contributes 66% of rental income. In the first four months of 2013, the sales value of Ruian Real Estate's real estate contract property reached RMB 4.65 billion, accounting for 42% of the annual property sales target of RMB 11 billion. The cumulative sales area was 163,000 square meters. The year-on-year growth rate between sales value and sales area reached an astonishing 342% and 276%. In addition, there is also a subscription sales amount of 1.27 billion, which can be said to have locked in sales of 6 billion dollars. We can see signs that Ryan Real Estate is improving sales, increasing the scale of sales, increasing the speed of sales, and speeding up the return of sales funds. We believe that according to the current sales rate, Ruian Real Estate's residential sales will most likely exceed 12 billion dollars, creating a new high, and the overall commercial sales target of 2 billion dollars can be achieved. In order to release more liquid capital and realize investor returns, Ruian Real Estate established China Xintiandi Co., Ltd., which focuses on the development and operation of investment properties, and plans for future spin-off and listing. We believe that splitting Xintiandi would be a win-win solution. On the one hand, the company can use the funds raised to speed up the development of sales properties and increase asset turnover; on the other hand, China Xintiandi can attract investors who focus on stable dividend income and increase valuations.