Key investment points The company's performance is in line with expectations, and the gross settlement margin has declined. In the first half of the year, the company achieved revenue of 7.85 billion yuan, +78.6% year-on-year, and net profit of 620 million yuan, +57.3% year-on-year. The company's gross profit margin for the first half of the year was 29.0%, a significant decline from 47.7%/42.7%/31.9% in 2014/15/16. We believe that the projects obtained by the company in 2014 and 2015 have entered the settlement cycle one after another. Although the company's gross margin has declined, the scale of the company has expanded rapidly. At the end of the first half of the year, the company received 20.25 billion yuan in advance, +75.4% over the same period last year and +10.4% over the beginning of the year. The company's ability to release stable performance in the future is strong. The impact of regulation is evident, and sales have slowed. The company achieved positive contract coverage of 500,000 square meters in the first half of the year, -28.3%; the contract amount was 9.3 billion yuan, -1.1% year-on-year. The company's main sales cities in the first half of the year were Beijing, Changsha, Wuhan, Hangzhou, Chengdu, Nanjing, Hefei, etc., all of which had strict real estate regulations. In particular, price limits and restrictions on online signings had a certain impact on sales data based on online signage statistics. It is worth noting that the share of Beichen Delta in the company's sales fell from 52.7%/42.4%/27.4% in 2014/15/16 to 22.6% in the first half of 2017, and the company's dependence on single disk gradually declined. However, due to rising land acquisition costs in recent years, the company's gross margin has also been affected to a certain extent. Combining weight and importance, leading the development of the domestic exhibition industry. The company owns and operates a property area of 1.27 million square meters in the core area of Beijing's Olympic Asia. In the first half of the year, the company invested in properties achieved revenue of 1.23 billion yuan, up 3.0% year on year, and profit before tax of 4.2 billion yuan, up 5.1% year on year. Relying on its long-term experience in property ownership, the company has continuously strengthened new business in the exhibition industry, expanded new technology, and made progress in hotel brand management and export work, gradually forming a diversified service profit model with contract management as the core and “Beichen Exhibition” as the brand. At present, the company's exhibition business has entered 21 cities across the country, with a total contract management area of nearly 1.85 million square meters. Risk warning. 1. The company's large-scale land acquisition period is relatively late, and there is no obvious advantage in land costs, and the future gross margin level may not be very high; 2. The company has many hot cities and is greatly affected by regulation; 3. Although the company's exhibition business is developing rapidly, it is not yet able to provide substantial and significant support for performance. Profit forecasts and valuations. The company's performance is in line with expectations, gross margin has declined, and scale has expanded rapidly. The company has some high-quality resource reserves in the Beijing region, and the exhibition business has certain characteristics. Considering the company's positive settlement, we raised the company's profit forecast for 2017/2018/2019 to 0.28/0.35/0.41 yuan/share (original profit forecast 2017/2018 0.23/0.29 yuan/share), maintaining the NAV8.10 yuan/share forecast. We gave the company a 20% discount on NAV, which is equivalent to the target price of 6.48 yuan/share, maintaining an investment rating of “increased holdings”.