Profit per share for 1-3Q was 0.20 yuan, up 35.2% year on year. In line with expectations, Huayuan Real Estate announced 1-3Q17 results: operating income of 5.594 billion yuan, up 22.0% year on year; net profit attributable to parent company was 474 million yuan, up 35.2% year on year, corresponding to earnings of 0.20 yuan per share. The amount of sales declined sharply. The company's sales volume for the first three quarters was 5.64 billion yuan, a year-on-year decrease of 34.6%; of these, commercial property sales fell 82.4% to 657 million yuan, and office property sales fell 61.7% to 308 million yuan. Increased settlement scale boosts revenue growth. The company's real estate settlement revenue increased by 22 percentage points in the current period, mainly due to the 128% year-on-year increase in the area completed during the period to 309,000 square meters. The main settlement projects are Beijing Xihongshi Project, Tianjin Boston Site 43, and Xi'an Blue City Phase V Project. The disposal of Huayuan Yingdu recorded a large investment income. The current period recorded investment income of 9.125 million yuan (1.98 million yuan in the same period last year), mainly from the disposal of 20% of Huayuan Yingdu's equity income. The trend is that the net debt ratio is still at a high level. The company's net debt ratio for the current period was 96.1%, up 3.6 percentage points. During the reporting period, the company issued a medium-term note (coupon interest rate 5.50%) and raised 1.5 billion dollars. Although short-term debt repayment pressure was relieved to a certain extent, long-term loans increased by 218% compared to the beginning of the period to 3.765 billion. We still need to pay close attention to the impact of financial costs on the company's performance in the future. Profit Forecast Considering that sales during the year fell short of expectations, we lowered our earnings per share forecast for 2017 by 9% from RMB0.47 to RMB0.43. Valuation and recommendations Currently, the company's stock price corresponds to 9.8/8.1 times the 2017/18e price-earnings ratio. We maintained a neutral rating, but lowered our target price by 15.67% to RMB 4.36, mainly because sales fell short of expectations and the financial side did not improve significantly. Risky real estate regulation risks are increasing.