Event: From January to September 2017, the company achieved revenue of 5.59 billion yuan, a year-on-year increase of 22%, net profit of 4.7 billion yuan, a year-on-year increase of 35%, and basic earnings per share of 0.2 yuan, an increase of 24% over the previous year. The increase in gross margin helped increase performance, and the performance guarantee for the whole year was high. During the reporting period, the company achieved revenue of 5.59 billion yuan, a year-on-year increase of 22%, and a gross profit margin of 23%, an increase of 4 percentage points over the previous year. The increase in the company's net profit compared to revenue was even greater. On the one hand, this was the reason for the increase in gross settlement margin, and on the other hand, it recorded a contribution of 90 million yuan in investment income in the report. In addition, the company's management expenses increased by 94% due to a decrease in capitalization and an increase in costs. Assuming that the full-year revenue growth rate remains at the level of the end of the third quarter, the performance guarantee factor will reach 150%, and the certainty of annual revenue growth is expected to be high. The sales amount was affected by the unit price and the growth rate declined, and the long-term impact was small. In the first three quarters, the company's sales volume fell 35% year on year to 5.64 billion yuan, and the sales area increased 4.5% year on year to 534,000 square meters. The company's sales showed a decrease in volume and price. The main reasons were: (1) the average sales price of commercial and office projects fell 29% and 37% respectively; (2) the sales ratio of warehousing and parking spaces with lower average sales prices increased to 21% from 8% in the same period last year; (3) the unit price of commercial residential sales fell 10% year on year. In recent years, the company has gradually entered Xi'an, Changsha, Tianjin, Guangzhou and other places through multi-channel land acquisition. The urban structure layout is more reasonable. Currently, it can sell 2.5 million square meters of construction (including unbuilt), and is expected to be less affected by the decline in sales in Beijing in the future. Issuing low-cost tickets reduces costs, and the three-fee ratio is well controlled. On September 19, the company completed the issuance of 1.5 billion yuan of securities, at a cost of 5.5%, lower than the comprehensive financing cost for the full year of 2016 (5.85%). In the current context of rising financing costs for housing enterprises, the company's ability to control financing costs is expected to continue to exceed expectations. In addition, the company's sales payback rate has also remained at a high level in the industry all year round. As can be seen, the company's dual advantage in terms of financing channels and capital costs helps to accelerate the company's development and removal of existing inventory. In the first three quarters, the company's three-fee ratio was 5.6%, a slight increase of 0.1 percentage points from the full year of 2016. The overall control ability of the three-fee ratio is relatively good, and the net profit margin is expected to increase throughout the year. Valuation and profit forecast: The company's real estate projects are arranged 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, with a corresponding stock price of 6.3 yuan. Through RNAV estimation, we gave the company a reasonable stock price of 7.0 yuan, which is 42% off the current stock price. Risk warning: real estate policy risk, commercial real estate price fluctuation risk