Crown Castle International Corp Chase (600067.CH/ 7.61Buy) released its 2017 interim results report: in the first half of 2017, the company achieved operating income of 3.748 billion yuan, an increase of 54.34% over the same period last year. Affected by the regional differences in the settlement of real estate projects and the investment income from the transfer of 12.38% of the equity of Beijing Shichuang Science and Technology Park Development and Construction Co., Ltd., the net profit belonging to the shareholders of the listed company was 511 million yuan, an increase of 1393% over the same period last year. We believe that the higher-than-expected release of the company's real estate performance this year reflects the company's high-quality real estate asset reserve layout, while the company's lithium battery project is progressing smoothly, the PACK line has recently completed commissioning, the core line is about to be debugged in September, and is expected to be fully put into production in the fourth quarter, while Crown Castle International Corp Ruimin produces lithium manganate batteries for Yangzhou Yaxing bus, realizing the zero breakthrough of the company's supporting products in the vehicle announcement. We expect to contribute a net profit of 180-200 million yuan after 18 years, which has recently significantly benefited from the higher-than-expected sales of new energy vehicles and the catalyst for the landing of the points system, and we reiterate our buy rating.

Support the main points of rating

The "Greater Nanjing" project constitutes the main sales force, adding new plots in Changshu to increase reserves. From January to June 2017, the company's real estate business realized a contract sales area of 94900 square meters, mainly selling 25,000 square meters of Nanjing Crown Castle International Corp Lanxun project and 35,000 square meters of Nantong Jun and Palm Bay projects. the contract sales amount was 1.334 billion yuan, a decrease of 47.4% over the same period last year, and the average sales price was 14,000 yuan per square meter, which was mainly affected by the project development cycle and partial regulation and control. The unsettled accounts received by the company at the end of the period is 2.521 billion yuan, but the settlement resources are still sufficient. In terms of investment, the company opened and resumed work in the first half of the year with a total area of about 691000 square meters, and in the first half of the year, the company added new plots in Changshu, with a total land area of about 113000 square meters, further increasing the company's land reserve.

Beijing high gross margin project entered the settlement cycle, the net profit greatly increased the value of the property. During the reporting period, the company's real estate business realized a settlement area of 89300 square meters, mainly settling 37,000 square meters in Beijing Baiwang Xinglin Bay and 29,000 square meters in Nantong Jun and Palm Bay, with a main business income of 2.064 billion yuan, an increase of 81.21% over the same period last year. The net profit was 682 million yuan, an increase of 1096% over the same period last year. Among them, the Beijing project built by Haike realized a settlement area of 36700 square meters, realized a main business income of 1.539 billion yuan, an average settlement price of 42,000 yuan per square meter, a net profit of 433 million yuan, and a net interest rate of 28%. Cash in the value of high-quality property assets.

The new energy production line has been debugged and put into production soon, and the complete vehicle supporting products have completed a zero breakthrough. Crown Castle International Corp Ruimin, a subsidiary of the company, speeds up the equipment introduction, installation and commissioning of the lithium battery project. At present, the Pack automatic production line has been installed and debugged to meet the production conditions, and the battery production line is expected to be completed by the end of September. At the same time, the sales and market development of the company's lithium battery products are also being carried out step by step. In the 298th batch of "Road Motor vehicle Manufacturing Enterprises and products" announcement issued by the Ministry of Industry and Information Technology in July, Crown Castle International Corp Ruimin produced lithium manganate batteries for the Yaxing brand pure electric city bus declared by Yangzhou Yaxing bus Co., Ltd., realizing the zero breakthrough of the company's supporting products in the vehicle announcement. Crown Castle International Corp Ruimin is expected to go into production in the fourth quarter of this year. In the first half of the year, Fujian Chuangxin Technology and other companies, which produce lithium battery electrolyte additives, achieved a total main business income of 8.07 million yuan. In the second half of the year, the company will speed up the commissioning of Crown Castle International Corp Ruimin battery production line and gradually open up the market with product technical advantages.