From January to September 2010, the company achieved operating income of 624 million yuan, an increase of 120.29% over the same period last year; operating profit of 141 million yuan, an increase of 34.64% over the same period last year; net profit of 83.3402 million yuan belonging to the parent company, down 3.70% from the same period last year; and basic earnings per share of 0.12 yuan.

The growth of settlement income of real estate business is the main reason for the growth of business income: the company is a listed company of real estate A shares in Chongqing, mainly engaged in primary and secondary real estate development, housing sales and leasing, site leasing, tunnel operation and so on. From January to September 2010, the company's main settlement project is to pray for the New year Yuecheng, the project has been basically sold. Due to the low gross profit margin of the Yuecheng project, the gross profit of the real estate business has declined compared with the same period last year, which is the main reason for the decline in the company's net profit. From January to September 2010, the company's gross profit margin was 44.78%, down 7.27 percentage points from the same period last year. At the end of September 2010, the advance collection of the company's real estate project sales was only 5.07 million yuan, a sharp decrease of 281 million yuan, or 98.23%, compared with the end of 2009. This shows that during the reporting period, the items sold by the company have basically been settled, resulting in a substantial increase in operating income. In addition, the company only controls 51% of the shares of the Yuecheng project development company, which is also the reason for the high profit and loss of minority shareholders during the reporting period. At the end of the reporting period, the company's commercial and residential project reserves include: Banan Jinzhu Industrial Park project, Nanan District Huangshuiya project, Chongqing Development's first project, etc., all obtained through the land auction market in 2009. At present, the reserve area of the company is about 1 million square meters, and there are no items on sale at present. It can be recognized that the income is less this year and next year, but the prospect of business follow-up development is better.

Revenue from exhibition and tunnel operations contributes to stable cash flow. The company's toll business, including Shihuang tunnel operation and convention and exhibition center operation, can provide a relatively stable cash flow, but lack of growth, which is also one of the reasons for the slow growth of the company's revenue.

There are still major shareholders expected to inject assets. According to the guidance on further promoting the overall listing of municipal key state-owned enterprises issued by the Chongqing Municipal Government, the integration of state-owned assets and overall listing in Chongqing can be foreseen. The major shareholder of Chongqing Development is Chongqing Urban Construction Investment Group, one of the eight state-owned investment groups in Chongqing, and the second largest state-owned investment group in Chongqing with land reserves of more than 100000 mu. It is mainly distributed within 1000 square kilometers of the main city, and 8000 mu of land is being requisitioned and consolidated. As the only listed company under the city investment company, Chongqing Development has obvious strategic significance in the rapid development of the city investment company.

Considering that part of the business of the major shareholders is closely related to the business of Chongqing Development, at the same time, there is a huge demand for funds in the development plan of the major shareholders, and the major shareholders clearly put forward the hope that most of the funds will be obtained through capital market financing, so the motivation of the major shareholders to expand and strengthen the listed companies is relatively clear. Although the rights issue plan failed in June this year, there is still room for further operation in the future.

Regional planning promotes the development expectation of the company. The planning plan of "Liangjiang New area" has been approved by the State Council. from the perspective of the development of Pudong and Binhai Development Zone, economic development has given quite broad room for land appreciation. The formation of the "Liangjiang New area" plan will certainly promote the urbanization construction of Chongqing, so as to enhance the housing demand of Chongqing. For enterprises with a large number of land reserves, the value-added of land and the further improvement of demand is the opportunity for the company to achieve rapid growth.

Profit forecast and valuation: we predict that from 2010 to 2012, the net profit of the company belonging to the parent company is 110 million yuan, 147 million yuan and 197 million yuan, and the earnings per share are 0.16,0.21 yuan and 0.28 yuan, corresponding to the closing price of 9.54 yuan on October 21, the dynamic PE is 61 times, 45 times and 34 times respectively. The company does not have much land reserve, but its location is more favorable. The planning of "Liangjiang New area" has enhanced the real estate demand in Chongqing, and the future project sales are promising. If the development progress is expected, the company's performance is expected to increase steadily. At the same time, taking into account the expectations of major shareholders to further inject assets, we maintain the company's "overweight" investment rating.