Report summary The precise layout of pension real estate. The resource value of the Chongming Island project highlights the company's **** Chongming Health Manor Project in Chenjia Town, Chongming Island. The planned land use of 2,000 acres will be built as a typical exemplary health and pension housing and cultural and creative industry project. By the end of 2015, the elderly population aged 60 and above in Shanghai was 4.3595 million, accounting for 30.2% of the total population. The potential market demand for pension real estate was huge, **** Real Estate had accurate advance layout and positioning, and had the synergy advantage within the entire **** Group industry chain. Combined with the potential room for land appreciation on Chongming Island with policy planning support, the company's future performance is expected to continue to achieve a high growth rate. The layout of cold chain logistics has a first-mover advantage. Currently, China's perishable food has exceeded 1 billion tons, of which more than half require cold chain transportation. As of 2016, the cold chain circulation rates of fruits and vegetables, meat and aquatic products in China reached 22%, 34% and 41% respectively, and the refrigerated transportation rates were 35%, 57%, and 69%, respectively. Currently, a complete and independent cold chain logistics system has not been formed in China. The development of cold chain logistics is still limited to refrigeration and transportation, and the potential market space is huge. As a national food aircraft carrier, **** Food Group has rich logistics resources. The company has great space and potential for optimizing and integrating logistics resources within **** Food Group in the future. Facing increasing demand in the future cold chain logistics market, the company's advance card layout is expected to bring new performance growth points and great future potential. Taking advantage of the national reform, institutional innovation and growth rate have improved Shanghai's major state-owned capital. As an established state-owned enterprise in Shanghai, **** Group, the majority shareholder of the company, is expected to take the lead in the next round of Shanghai's national reform. We believe that in the future, **** Real Estate is expected to achieve institutional innovation through external cooperation and internal incentives, stimulate employee enthusiasm, increase growth and efficiency, and achieve further improvement in the company's operating efficiency. Profit prediction and investment suggestions As a real estate enterprise with a state-owned background in Shanghai, **** Real Estate relies on the Shanghai State-owned Investment Platform to actively acquire and expand land acquisition projects. The cost advantage of adding additional land reserves is obvious, and the saleable value is abundant. The company actively expands financing channels, has a healthy financial structure, and has achieved rapid growth in performance in recent years. The company's high-quality resource endowments are potential beneficiaries of Chongming Island's world-class ecological island planning and Shanghai's state-owned enterprise reform, and its performance is expected to continue to grow rapidly. We predict that **** Real Estate's EPS for 2018/2019/2020 will be 1.32 yuan, 1.67 yuan, and 2.07 yuan. The corresponding P/E will be 4.8 times, 3.8 times, and 3.1 times. The maximum, median, and minimum values of the company's price-earnings ratio in the last three years are 115.8, 21.9, and 5.0x, respectively, giving it a “Highly Recommended” rating. Risks suggest that real estate sales fall short of expectations, progress on the Chongming Island project falls short of expectations, and the progress of state-owned enterprise reform falls short of expectations.