An established leading development enterprise transformed property ownership and operation, and personnel and incentives were in place 1) The company began business transformation in recent years, gradually withdrew from the development business, and increased the layout of owned properties. 2) Introducing Battle Pro, and a new management team lays out a new track. 3) The equity incentive mechanism is about to be put in place and ready to go: The company plans to use its own funds to repurchase some of the company's shares through centralized bidding and use all of them for employee stock ownership plans or equity incentives. 4) Invest in Jinyi Capital to help transform the layout: Use the advantages of a professional investment management team to broaden the company's investment channels and improve the efficiency of capital use, and use fund platforms to find enterprises with potential for development. Development business: High quality stock soil storage guarantees steady release of performance during the transition period According to the performance forecast on January 15, 2020, the company expects to achieve net profit of 55-650 million yuan in 2019, an increase of 68-100% over the previous year; as of mid-2019, the unsold value of the company's development business was about 4.285 billion yuan (excluding Xianghe Canal International Eco-City Phase II) to ensure future sustainable development; in addition, 70% of the company's shares in the Canal International Eco-City project have been transferred to Shimao, but the remaining 30% of the shares are expected to be realized during the current transaction. Investment income is about 660 million yuan, and it is expected that investment income of about 230 million yuan will be confirmed in the future. Commercial real estate: With core office resources, rent growth can be expected. The company's office building is located in the core area of Tier 1 and 2 cities: The company has begun to increase its commercial property layout in recent years. Beijing Wantong Center is located in the central area of the Hongqiao business district, and Tianjin Wantong Center is located in the financial center of Tianjin Heping District. It has now formed a standardized and mature Class A office operating brand. In recent years, the company's revenue from its own properties has been stable, and the rentable construction area has continued to grow: since 2016, the company's rentable property construction has maintained steady growth. In the first three quarters of 2019, the company achieved rental revenue of 185 million yuan, an increase of 9.74% over the previous year. Considering the balance between supply and demand for office buildings in Beijing and Shanghai, rental income is expected to grow steadily, and there is room for the company's office occupancy rates in Shanghai and Tianjin to continue to increase, so the company's income from self-owned and operated properties is expected to maintain steady growth in the future. Financial analysis: Sufficient monetary capital drives transformation and upgrading, and the scale of interest-bearing debt continues to decline, and the debt burden is light: The company's interest-bearing debt has declined significantly since 2016, and the balance ratio has also decreased year by year. The company has sufficient monetary capital to drive transformation and upgrading: Of the company's 2.6 billion interest-bearing liabilities, only 200 million interest-bearing debt matures within a year, while the company's book capital reached 2.2 billion. Considering that most of the company's unsold inventory was completed, there was little follow-up investment in projects under construction, sufficient monetary capital, and a sound financial structure also laid a solid foundation for the company's future strategic transformation. Investment advice: Strengthen the elimination of real estate development business: In 2019, the company transferred the Guomao Z3 plot to Prologis and 70% of the shares in the Xianghe Canal International Eco-City project are expected to receive high investment returns; at the same time, the company currently has high-quality land storage to ensure the smooth release of performance in the next few years. Continued commercial real estate layout: At present, the company has built “Wantong Center” into an excellent grade A office brand, and rental income is growing steadily. Asset-light transformation without pressure: The company's debt ratio is at a very low level in the industry, short-term debt repayment pressure is light, and monetary capital is abundant, laying a solid foundation for the company's transformation and upgrading. In summary, we are optimistic that while the company is steadily releasing performance, it will go to battle lightly and explore new types of business development based on commercial real estate. The company's 2019-2021 EPS is expected to be 0.26 yuan, 0.32 yuan, and 0.40 yuan respectively. The current stock price corresponds to the 2019-2021 PE of 21.3X, 17.3X, and 13.5X, respectively, maintaining a “buy” rating. Risk warning event: Real estate industry regulation exceeded expectations, and the company's real estate project settlement fell short of expectations.