Unique opinion: Beichen Industrial owns high-quality properties in prime locations in Beijing. The book price is only 1/10 of the current price in the surrounding area, and there is huge room for subsequent revaluation; starting in 2014, the development business restarted the path of national expansion, and land acquisition expansion was accompanied by a surge in sales, thus driving a sharp increase in advance payments and considering a recovery in gross margin. In addition, 17-18 will usher in a reversal in performance; at present, the degree of business and resource integration between the company and the group is high, and business and resource integration between the company and the group can be expected. We expect the company's EPS in 17-19 to be 0.27, 0.36, and 0.49 yuan respectively. According to the cash flow discount method, we conservatively estimate that the company's NAV is 32.6 billion yuan, and the corresponding NAV per share is 9.67 yuan/share. Currently, A/H shares are seriously underestimated compared to 36%/72%, respectively. The target price for A/H shares is RMB8.22 /HK$4.64 according to the NAV discount rate of 15%/60%, respectively. It is covered for the first time and is highly recommended. Investment points 1. Development of the three main businesses of property+investment property+exhibition business. Beichen Industrial, which is a high-quality target for state-owned enterprise reform in Beijing, is an enterprise directly under the Beijing State-owned Assets Administration Commission, and is held 34.48% by Beichen Industrial Group. The company was listed on H shares and A shares in 1997 and 2006, respectively. The company's and group businesses are divided into three segments: real estate development, investment properties, and exhibition business. Currently, there is a high degree of overlap between the group's overall business and the company level. At the same time, according to the April 1997 peer competition commitment between the group and listed companies, future business and resource integration between the group and listed companies may also be worth looking forward to; furthermore, with the continuous advancement of state-owned enterprise reform in Beijing, the value of the company's listing platform may be further highlighted. 2. Owning nearly 1.2 million square meters of high-quality property in Beijing, with an average valuation of 44.2 billion yuan, and an underestimated company holding 1.24 million square meters of investment property (1.16 million square meters in Beijing+80,000 square meters in Changsha), it is basically located in the core area of Asia and the Olympics in the North Fifth Ring Road of Beijing. Currently, the book price is 5,814 yuan/flat vs. the average commercial price in the surrounding area exceeds 50,000 yuan/square meter, so there is huge room for revaluation; the business is mainly exhibitions, commerce, etc., with steady growth in rental income and stable cash flow (about 2.6 billion yuan), which is also a buffer for the company's performance; we are currently using cash flow discounts Law (17.2 billion yuan), Comparable Property Revaluation Law ( Three methods, such as 53.5 billion yuan) and the comparable company rent return method (62 billion yuan), revalue the property held by the company of 1.24 million square meters. The average revaluation value is about 44.2 billion yuan, and the company's value is clearly underestimated. National expansion was restarted in 3.14, and rapid sales growth drove a sharp increase in advance payments, and is expected to usher in a reversal of performance. The company's development business was concentrated in Beijing in the early years. It first left Beijing in 2007 and settled in Changsha. After 7 years of silence, it restarted the path of national expansion in 2014 and actively acquired land. Currently, it has settled in 14 key Tier 1 and 2 cities including Suzhou, Chongqing, and Wuhan. With the beginning of land acquisition and expansion in 2014, the company began to expand rapidly in 2015. The sales amount in 2015 reached 7.3 billion yuan (YoY 80%) and 22.6 billion yuan (YoY 208%), respectively, corresponding to the company's 16 and 17H1 settlements, with a year-on-year increase of 82% and 113%, respectively. Currently, the prepayment at the end of 17H1 is as high as 20.3 billion yuan (YoY 75%), which has covered 2.9 times the revenue of the development business in '16, and 17H1 seems to have a recovery trend. Overall, it will influence the company's performance in 17-18 Guarantee 4. Investment advice: High quality resources and performance reversal, Beijing reverses and pushes the company's earnings per share forecast for 2017-19 to be 0.27, 0.36, and 0.49 yuan respectively. Currently, the 2017 PE of A shares/H shares is 23.2 times /10.0 times respectively. Compared with the PE valuation of similar housing enterprises, the company's NAV is conservatively estimated at 32.6 billion yuan according to the cash flow discount method. The corresponding NAV per share is 9.67 yuan/share. Currently, A share/H share is discounted 36%/72% The value is seriously underestimated. The target price for A shares/H shares according to NAV's 15%/60% discount is RMB8.22/ HK$4.64, respectively. This is the first time it has been covered and is highly recommended. 5. Risk warning: downside risk in the real estate market.