Guancheng Chase's 1-3Q earnings of 0.17 yuan per share exceeded expectations: operating income of 4.50 billion yuan, up 12.8% year-on-year; net profit attributable to the parent company was 250 million yuan, up 2.6% year on year, corresponding to earnings of 0.17 yuan per share. Real estate settlement area and gross margin both rebounded: the company's real estate settlement area was 284,000 square meters, up 56.0% year on year. Major settlement projects include Guancheng Datong Blue County (135,000 square meters) and Junhe Palm Cove (55,000 square meters). The consolidated gross margin for the period rebounded 0.5 percentage points to 16.2% compared to the same period last year. High sales growth: The company's real estate sales area during the period was 299,000 square meters, up 40.1% year on year, achieving sales volume of 3.77 billion yuan, up 43.5% year on year. The main sales projects were Nanjing Guancheng Datong Lanjun (125,000 square meters) and Junhe Palm Bay (60,000 square meters). The net debt ratio is at a low level in the industry: the company's net debt ratio at the end of the period fell 10.0 percentage points to 6.5% from the beginning of the period, which is at a very low level in the industry. Cash on hand at the end of the period was $4.30 billion, which is much higher than the sum of short-term liabilities and one-year non-current liabilities of $1.47 billion. The development trend employee stock ownership plan and new business are worth paying attention to: the second phase of the company's employee stock ownership plan has now purchased a total of 110 million yuan in shares, with an average cost of 7.05 yuan. In addition, the company's transformation businesses such as internet finance, lithium batteries, and equity investment are being actively implemented: the transaction amount on the “Haitouhui” P2P platform exceeds 300 million yuan in half a year, the lithium battery project will complete equipment bidding and procurement in the second half of the year, and the company will invest 300 million yuan to launch the Aviation Technology Fund, etc., and the new business will become the company's future highlight. Earnings Forecast We maintain our earnings per share forecast for the full year of 2016/2017 unchanged. Valuation and recommendations Currently, the company's stock price corresponds to 21.2/17.1 times the 2016/17 price-earnings ratio. We maintain a neutral rating and target price of RMB 7.65, with 6.25% upside compared to the current stock price. Risk macroeconomic downturn.