Key investment events: On June 26, while attending the Summer Davos Forum in Tianjin, Premier **** visited Zhuolang Technology, which holds 39% of the shares in Tianjin Songjiang. Zhuolang Technology also became one of the three Tianjin companies visited by the Prime Minister this time. **** expressed his hope that Zhuolang Technology will create space for more enterprises, attract customers, and developers, develop a larger market, and serve more enterprises, and that Zhuolang Technology will grow from a small giant to a giant. Comment: Zhuolang has strong technological strength, and the Prime Minister praised the accelerated development. Zhuolang Technology was founded in 2009. Its main business is to provide technology and information services for the transformation and upgrading of traditional manufacturing industries based on big data, cloud computing, etc. Zhuolang Technology currently provides cloud computing services to 48,000 enterprises, helping 17,000 enterprises connect with government departments. Among the 40,000 enterprises provided by Zhuolang Technology, most are in the traditional manufacturing industry. Of these, more than 15% are large enterprises. The company mainly performs intelligent modifications to the equipment products of these large enterprises and provides software and other services. Zhang Kunyu, the founder of the company, graduated in 2008 and founded Zhuolang Technology. He is strong in strength and has a forward-looking vision. Zhuolang Technology's core product is an integrated system platform. Its highlight is the “Ten Thousand Enterprise Transformation and Upgrading Platform” built in 2015. More than 200,000 software engineers have registered on the platform. Since its launch, the platform has rapidly “integrated industries and connected with government and enterprises.” Since its establishment, Zhuolang Technology has experienced five years of leapfrog growth. Its main revenue business has grown from 9.3 million yuan to 580 million yuan in 2015, and its net profit in 2015 exceeded 70 million yuan. From January to June 2016, the company achieved sales revenue of 450 million yuan. In September 2015, Tianjin Songjiang increased the capital of Zhuolang Technology by 312 million yuan through a partnership fund and obtained 39% of its shares, becoming the second largest shareholder. We believe that the Prime Minister's affirmation and high expectations have demonstrated the strong scientific and technological strength of Zhuolang Technology, while also providing sufficient impetus for the rapid development of Zhuolang Technology. Zhuolang Technology helps Songjiang, Tianjin build a smart city. In 2015, Songjiang, Tianjin began promoting the master plan and top-level design of the Nankai District Smart City Project — “Smart Nankai”. Zhuolang Technology's technical strength and past project experience are in perfect harmony with the Tianjin Songjiang Smart South Development Project. We believe that Zhuolang Technology's strong strength will not only help complete the Smart Nankai Project, but will also provide strong support for the development of Tianjin's Songjiang River in more fields such as big data, smart cities, and the Internet of Things. Accelerate the divestment of the real estate business and quickly return cash. Since the company's backdoor listing in 2009, there has been less capital market financing, resulting in consistently high financial costs. In this context, on the one hand, the company actively lays out diversified development, and at the same time divests real estate projects through the transfer of project equity and construction in progress to achieve a rapid return of capital. Since this year, the company has accelerated project transfers. The company has announced that it will transfer the Shui'an Tianyuan project for 656 million yuan and the Tianxiyuan project for 180 million yuan. Various transfers are progressing. Investment advice: Zhuolang has strong technological strength, which is conducive to the rapid expansion and development of the company in the fields of big data and smart cities. The company accelerated the divestment of the real estate business, returned cash, and firmly transformed. We are optimistic about the company's broad future development space in smart cities and other fields. Considering the approval of the additional distribution, the 2016-2017 EPS is expected to be 0.11 and 0.31 yuan respectively, corresponding to PE 54 and 19 times, respectively, maintaining the “increased holding” rating. Risk warning: Real estate sales have declined sharply; diversification has fallen short of expectations.