The investment recommendation company announced 1H17 results. Operating income during the period fell 27% year on year to 300 million yuan, and net profit was reduced 30% year over year to 71.25 million yuan. Considering that the company's performance fell short of expectations, we lowered the company's target price to 12.8 yuan and lowered the company's rating to neutral. The reasons are as follows: both settlement revenue and gross margin declined: the company's project settlement revenue during the period was 8881 million yuan, down 55% year on year, leading to a year-on-year decline of 27% to 300 million yuan; comprehensive post-tax gross margin during the period fell 2.8 percentage points to 40.4% year on year; the average sales price decline was mainly due to sales of residential projects in Shuozhou: the company achieved a real estate contract sales amount of 42 million yuan during the period, and the average sales price was less than 15,000 yuan/square meter, far lower than the average sales price of industrial parks in the Jiuxianqiao area (about 30,000 yuan/square meter), mainly due to sales during the current period The housing project in Shuozhou; the financial structure is still healthy: the company was still in net cash position at the end of the period, with 3.6 billion yuan in cash on hand, far higher than the company's total interest-bearing debt of 870 million yuan. The financial structure is healthy. We are the biggest difference from the market. We expect the company's full-year performance growth rate to fall short of expectations. Potential catalyst: 1-3Q performance still declined sharply. Profit forecast and valuation. Considering that the company's performance in the first half of the year did not meet expectations, we lowered the company's profit forecast for 17/18 by 22%/13% to 0.67 yuan/0.95 yuan per share, respectively. The current stock price corresponding to the price-earnings ratio of 17/18 is 17.3 times /12.1 times, respectively, with a 30% discount from NAV. We lowered the company's target price by 22% to 12.8 yuan, the target price corresponding to the NAV discount by 22%, and downgraded the company's rating to “neutral.” Risk Macroeconomic downside risk.