On March 9, the company released its 2012 report: Achieved operating income of 265.363 million yuan, an increase of 303.79% over the same period of the previous year, operating profit of 9.6628 million yuan, an increase of 26.6533 million yuan over the same period last year, and net profit attributable to shareholders of listed companies of 6.2065 million yuan, a year-on-year decrease of 88.1%. The main point of view is that the pearl in the Beijing-Tianjin Corridor benefits from the construction of the capital's second airport. Langfang is known as the “Pearl of the Beijing-Tianjin Corridor”, with a total population of 4.2 million and a built-up area of 54 square kilometers in the city. It is 40 km from central Beijing and 60 km from central Tianjin, respectively. According to the work report of Beijing's Daxing district government and the “12th Five-Year Plan”, the capital's second airport was selected as the location in the southern part of Daxing District, only 26 kilometers from Langfang City, which has a driving effect on Langfang's economy and real estate market. The company is the only state-owned listed company in Langfang City and has successfully transformed into a city investment company. In June 2011, Langfang Land Development and Construction Investment Co., Ltd. (Land Construction Investment for short) transferred 5 million shares of the company to Beijing Zhuanshixuan Real Estate, accounting for 13.17% of the company's total share capital, making it the largest shareholder. Land Construction Investment's consideration was $284 million in cash. In October of the same year, the company received an operating financial subsidy of 80 million yuan from the Municipal Finance Bureau. The local government directly invested about 364 million yuan in listed companies, which is equivalent to about 7.28 yuan per share based on the number of shares held. Bao Yongbo, the chairman of the company, is currently the chairman and general manager of Langfang Land Construction Investment. He has served as the deputy director of the Municipal Land Bureau and the director of the Land Reserve and Exchange Center, and is rich in political and business resources. Increasing business scope and improving profitability During the reporting period, the company resolved the litigation issues of Nanjing Zhongdian Technology Co., Ltd. and completed the transfer of shares of Shixin Technology Development Co., Ltd. and settled arrears of about 63 million yuan. The main factors driving changes in the company's business revenue in 2012 were that the company developed new business, increased project management consulting business and material trading business, benefiting from the increase in business scope, and the company's stock market was successfully removed. The company's non-operating income in 2012 decreased by 79.79 million yuan compared to the previous period, mainly because it received a subsidy of 80 million yuan from the Langfang Finance Bureau in the previous period. Relying on major shareholders' land construction investment to promote capital operations and seek strategic transformation, the company's majority shareholder Land Construction Investment mainly undertakes the development of Langfang Emerging Industry Demonstration Zone and Wanzhuang New Town; we expect the potential land area that the company can develop in Wanzhuang Town and Anci District in Guangyang District to exceed 150 square kilometers; 4-5 projects, including China Life Insurance Health and Pension City and COSCO Real Estate, have signed framework agreements to settle in Wanzhuang Town. The company's development strategy will step up efforts to seek high-quality assets, effectively manage capital, accelerate strategic transformation, and form new profit points, but the exact timing and method will be affected by policy regulation, and there is uncertainty. The investment suggests that the majority shareholders invest more in high-quality assets. The government invests more than 360 million yuan and adds investment promotion services to the company's business scope, park construction and management, etc., which may suggest that the company's room for growth should not be underestimated, but it is necessary to be wary of policy risks and market risks. We expect the 2013-14 EPS to be 0.2 yuan/0.27 yuan, and the corresponding PE is 40X/30X. We recommend giving the company a rating of “outperforming the market”.