The core view is that **** Real Estate is the only real estate listed entity under **** Group, and it is also an important source of performance for the Group. We believe that the real estate business has the potential to connect with the Group's resources, obtain high-quality land, and achieve steady growth in performance through accelerated turnover. Company valuation has advantages: in terms of absolute valuation, the stock price is nearly 50% discounted compared to RNAV; in terms of relative valuation, PE's vertical historical comparison and PEG horizontal comparison of companies are in a lower position. We expect the company's 2018-2020 EPS to be 0.83, 0.92, and 1.05 yuan, with a target price of 5.40-5.81 yuan. First coverage, giving a “buy” rating. Backed by **** Group, the group's main source of performance was the company that went public behind the scenes in 2015. The main business segments are real estate and logistics, but the focus of development is the real estate business, which accounted for more than 97% of revenue and gross profit in 2017. **** Group, the controlling shareholder, directly and indirectly holds 51.29% of the company's shares. The company's net profit in 2015-2017 accounted for 27.46%, 38.14%, and 59.93% of the Group respectively. It has gradually become an important source of the Group's performance and is a pillar enterprise of **** Group. The development business accelerates turnover and releases performance, and there is a potential to connect with the Group's resources. The company started a new construction of 1,887 million square meters in the first half of 2018, a sharp increase of 204.24% over the previous year. We believe that the company's accelerated commencement of new construction is to guarantee sales volume throughout the year and accelerate removal and repayment. The annual sales amount is expected to exceed 25 billion yuan. According to our estimates, the company's sales value at the end of the first quarter of 2018 is about 62.4 billion yuan, which can meet the sales demand for the next 2 years. In order to further expand saleable resources, the company stepped up land acquisition efforts in the second half of 2017, and added 760,900 square meters of real estate reserves in the first half of 2018, a year-on-year increase of 1187.48%. In the future, the company is expected to take advantage of the Group's advantages to seek new business opportunities in areas such as the urban village renovation project in Shanghai, the development of 2,000 acres of land on Chongming Island, and the connection between land and storage resources of sister companies within the group. Both absolute valuation and relative valuation are attractive in terms of absolute valuation. According to our estimates, the company's RNAV is 8.40 yuan, and the stock price is close to 50% off RNAV. In terms of relative valuation: From a vertical perspective, the company's current PE (TTM) is only 3.83 times, the lowest level since the restructuring and listing in September 2015. Looking horizontally, we selected Huafa shares, Shanghai Real Estate Development, Beijing Urban Construction, and Huayuan Real Estate, which has a background in the local State Assets Administration Commission and focuses on development business, as comparable companies. The average PE in 2018 was 7.76 times, and the average PEG was 0.85 (wind unanimously expected). However, according to our estimates, the company's PE in 2018 was only 5.18 times, and PEG was 0.40, which is somewhat underestimated. There is an advantage in steady growth in development business+valuation. For the first time, it was covered by a “buy” rating. We expect the company's net profit for 2018-2020 to be 18.45, 20.40, and 2,349 billion yuan, and EPS of 0.83, 0.92, and 1.05 yuan. Referring to the PE valuation of comparable companies 7.76 times in 2018, considering that the company's net profit in 2018 is expected to decline slightly year-on-year, and that the growth rate of large-scale net profit in 2018-2020 is expected to be slightly lower than that of comparable companies, we gave the company a certain discount. We believe that the company's reasonable valuation level is 6.5-7 times, and the target price is 5.40-5.81 yuan. First coverage, giving a “buy” rating. Risk warning: The saleable value is relatively low; real estate sales may be adversely affected by regulatory policies and tightening of shed reform loans.