Event: on March 15, the company announced that Xinhua Union, a subsidiary of South Korea, recently received the "Xinhua Union Fairview Villa Tourism Park Project Development license" from Jeju Special Autonomous Road, South Korea. Since the establishment of Xinhua Union of Korea in April 2014, the company has been actively carrying out the project of "Jinxiu Villa International Resort, Jeju Island". However, because South Korea belongs to private land ownership, the examination and approval process is more cumbersome. The company has obtained the development license of the Jeju Island project, which means that the preliminary preparatory work of the company has been completed, and the follow-up is expected to enter the construction phase.

Comments: South Korea project preparation is expected to continue to promote, enrich the format to promote the company's medium-and long-term travel performance. 1) South Korea Splendid Villa project is the company's first overseas travel project, located in Hanlinyi Jinyue, Jeju Island, about 30 minutes drive from Jeju Airport, convenient transportation, the total development area of the project is about 1 million square meters, with a total investment of about 5.18 billion yuan. It is expected to open in 2021. 2) after the completion of the project, it will become a five-star tourist hotel, holiday apartment, villa, children's park, shopping center, health center, entertainment city, duty-free shop, plastic surgery hospital, spa resort, golf resort and other forms of international first-class vacation and leisure destination. 3) in terms of profitability, the initial stage of the project will achieve rapid cash flow recovery and profit thickening through villa sales, while in the medium to long term, it will achieve sustained business income and increase profits through casinos, hotels, catering, plastic surgery hospitals, golf courses, convention and exhibition centers and other forms of business.

Relying on the advantages of mature real estate development and operation, coupled with the continuous landing period of the cultural travel project, the company's medium-and long-term performance is expected to continue to improve. 1) Future literature and tourism project layout: the company starts for real estate development and has rich resources and mature experience in scenic spot construction and real estate site selection, development and operation. At present, we focus on building five major cultural and tourism projects, Wuhu International Culture and Tourism Resort (opened in 2016), Tongguanyao Cultural Travel Resort in Changsha (opened in 2018), Langzhong Ancient City (joint venture development in 2018), Xining New Hualian Tourism City (first phase is expected to be 2019), South Korea Fairview Villa (expected in 2021), the opening time is echelon distribution, which is expected to continue to thicken the company's performance in the future. 2) in terms of stock scenic spots: Tongguanyao Ancient Town in Changsha attracted 30,000 tourists within one day of its opening on August 28, 2018, and the first peak of passenger flow was ushered in during the National Day Golden week, with more than 10,000 people buying tickets that day. Three days before the National Day Golden week, Tongguanyao ancient town has received a total of more than 30,000 tourists, reflecting the good tourist attraction of the ancient town. The ancient town of Jiuren is expected to close the park and charge fees in 2019, thickening the sustainable income of the project.

Investment advice: buy-An investment rating. The company's stock literature and tourism projects, such as Yuzi Ancient Town and Tongguan Kiln in Changsha, have gradually matured, and projects such as Langzhong Ancient City, Xining Resort and Jinxiushan transfer in South Korea have progressed steadily, and the "literature and tourism + finance" business is expected to enter a continuous harvest period. It is estimated that the return net profit of the company from 2018 to 2020 will be 11.3 million, 1.36 billion, 0.72, 0.83 and 8.0x/6.6x/5.7x, respectively. The target price for 6 months is 6.05 yuan.

Risk tips: 1) the passenger flow of the scenic spot project is lower than expected; 2) financial capital risk; 3) overseas business risk; 4) real estate policy change risk.