1-3Q17 revenue was +98.6%, net profit was +180.9%, and non-net profit was +122.6%, exceeding expectations of 1-3Q17. The company's operating income was 19.24 billion yuan, up 98.6% year on year, net profit was 1.21 billion yuan, up 180.9% year on year, and net profit after deduction was 140 million yuan, up 122.6% year on year. Among them, operating income for the third quarter was 6.75 billion yuan, up 106.1% year on year, down 2.4% month on month. Because the company replaced some shares in the parent company Chengtong Real Estate with shares in two subsidiaries, non-monetary asset exchange income of 1.41 billion before tax was included in current profit and loss, net profit from the mother increased 53 times over the same period last year. In 1-3Q17, the company's gross margin fell 1.4 percentage points year on year to 4.2%. Among them, the gross profit margin for the third quarter was 4.0%, down 0.8 percentage points from the previous year, and 1.8 percentage points from the previous quarter. The performance after deduction was in line with expectations, and the previous performance exceeded expectations. The scale of basic business is growing steadily, but costs are rising month-on-month. The company's main business is growing steadily, but costs are rising rapidly. Product value is included in the company's revenue, so the price of commodities such as steel rose, driving the company's third-quarter revenue to increase by 106.1% year-on-year, but its gross margin fell 0.8 percentage points to 4.0%. At the same time, it is important to note that the company's revenue fell 2.4% month-on-month, while gross margin fell 1.8 percentage points month-on-month, and gross profit fell to 270 million yuan from 400 million yuan in the second quarter, indicating an increase in the difficulty of controlling operating costs over the month. In addition, the company's operating tax and period expenses for the third quarter totaled 250 million yuan, up 100 million yuan from 150 million yuan in the second quarter. The profit margin was further reduced. However, due to last year's low base, net profit after deduction for the 3Q16 quarter was only 11.471 million yuan, and the increase in non-net profit was still impressive. The land value monetization model continued the current asset exchange profit and loss after tax of about 1.06 billion yuan (1.41 billion yuan of pre-tax income, 25% income tax impact), stemming from the transfer of 100% of the shares held by China Reserve Real Estate and Tianjin China Reserve Hengsheng Real Estate to the actual controller, Chengtong Group, by subscribing shares, with a total transfer price of 2.46 billion yuan. Its commercial land is located in Beichen, Tianjin, which is its original logistics land storage area. In the future, the land transfer model will still be one of the main sources of profit for the company. Adopting this model will gradually activate the potential value of the company's land. China Storage Intelligent Transportation opens up new markets, and car-free transportation or becomes a new growth point. The company develops car-free carrier business through the Nanjing China Storage Intelligent Transport platform. This model already has mature precedents in developed countries such as the US. For example, the US's CH Robinson has become the highest-grossing trucking company in the US through this model. By the end of 2016, the China Storage Intelligent Transport Platform had integrated more than 400,000 social heavy truck vehicles and cooperated with more than 2,000 cargo owners. It is expected that in the future, in addition to the company's warehousing and logistics business, it will gradually develop into a new profit growth point for the company. Non-recurring profit and loss caused fluctuations in performance and did not affect long-term value. Maintaining the “increase in holdings” rating The non-recurring profit and loss of equity replacement in the current period had a great impact on the company's performance. We believe that land monetization income will continue. Based on the company's average non-recurring earnings forecast for the past 3 years, including non-operating income, the profit forecast for 2017-19 was 12.0/11.4/1.28 billion yuan (previous value: 65/70.81 billion yuan). However, considering that the land monetization model does not affect the long-term value of the company, that is, the potential value of the large amount of high-quality land it owns, the target price and “holdings increase” rating are maintained. Risk warning: Falling commodity prices have reduced revenue scale and reduced profit margins.