Settlement of guaranteed housing is nearing completion, and profit indicators are expected to continue to rise. Judging from the revenue structure of real estate projects in recent years, the settlement ratio in North China (Beijing, Tianjin) has gradually increased to about 45%. However, in recent years, due to the impact of policy housing settlement unit prices in Beijing, the year-on-year revenue growth rate has declined. Up to now, the settlement of the company's policy housing projects in Beijing is nearing completion. With the gradual settlement of the Xihongshi Project, China Center, and Heshu Project in Beijing, it is expected that revenue and gross margin will increase significantly throughout the year. Deeply cultivate Beijing-Tianjin-Hebei, and lay out the first and second lines. In terms of project layout, the company follows the core idea of Beijing as the core, radiating Beijing-Tianjin-Hebei, Pearl River Delta, and the Midwest. Currently, the company has gradually entered Xi'an, Changsha, Tianjin, and Guangzhou through tenders, equity acquisitions, etc. The land storage cities are all Tier 1 and 2. Its projects can be sold for 2,051 million square meters (including unbuilt), and the Beijing and Tianjin regions account for 48% of the unfinished value, which is rich in value. Since this year, the company has successively obtained two projects in Guangzhou and Xi'an through share acquisitions, with a total construction area of 526,000 square meters. Of these, the Guangzhou Dayi Mountain Villa high-end villa project (152,000 square meters) holds 49% of the shares, and the remaining 51% of the shares are scheduled to be acquired in the second half of the year. Multi-channel financing reduces costs, and the three-fee ratio remains low. Since 2016, the company has successively raised nearly 6 billion yuan through multiple channels such as corporate bond issuance, ABS, and allotment of shares. The annual comprehensive financing cost was 5.85%, down 1.87 percentage points from 2015. In addition, the company's sales payback rate remains at a high level in the industry all year round. It can be seen that the company's dual advantages in terms of financing channels and capital costs help accelerate the development and removal of the company's existing inventory. As of mid-2017, the company's three-fee ratio was 5.5%, far below the industry average of 12.4%. Among them, benefiting from the impact of high interest capitalization, the financial rate was only 0.16%. Better cost control helped the company increase its net profit by 23% year-on-year in the first half of the year. Valuation and profit forecast: The company's real estate project layout is in Tier 1 and 2 core cities, and the land storage value is rich. We expect the company to achieve net profit of 1.23 billion yuan, 1.53 billion yuan, and 1.76 billion yuan from 2017 to 2019, corresponding to EPS of 0.52 yuan, 0.65 yuan, and 0.75 yuan respectively. Referring to comparable company valuations, we gave the company 12 times PE in 2017, corresponding to a stock price of 6.3 yuan. Through RNAV estimates, we gave the company a reasonable stock price of 7.0 yuan, a 31% discount compared to the current stock price. Risk warning: Real estate policy risks, the share acquisition of the Dayi Mountain Villa project falls short of expectations