The operating income and net profit of Huaxin Co., Ltd. in the first half of the year increased by 36% and decreased by 9%, respectively. Of these, net profit reached 140 million yuan, an increase of 9% over the previous year, leading to high annual performance growth, and a further increase in gross margin of 1.9 percentage points to 73.8% over the previous year. Low land costs drove a further increase in gross margin, while also once again demonstrating the high value content of the company's land storage; currently, it is the only real estate platform under the Department of Instrumentation and Electronics. It assumes the role of smart city property carrier. It is expected to gradually take on the role of smart city property bearer in Shanghai. To achieve an important role in revitalizing the assets of the instrument and electronics sector, Huaxin Real Estate, the majority shareholder, has also repeatedly promised to complete the resolution of competition issues in the industry by the end of 17. Currently, the company has suspended trading and entered the restructuring process on August 25. According to the announcement of the suspension of Huaxin Co., Ltd. and Feilo Audio, it is predicted that Huaxin Co., Ltd. will be the key target of restructuring, and there is a lot of room for integration; currently, the company holds 1.02 million square meters of commercial real estate, low land acquisition costs, and gross margin of undeveloped properties exceeds 60%. We have obtained 55-66 RNAV through methods such as net profit discount, cash flow discount, and rental return, etc. 100 million yuan , providing a certain margin of safety; in addition, the company's 14-16 land acquisition strategy adjustments will drive a reversal in sales and performance 16 years from now. The compound growth rate of 16-18 performance is expected to reach 41%, and subsequent asset injections by major shareholders will further strengthen the judgment of reversal in performance. We maintained the company's 2016-17 earnings per share at $0.34 and $0.50, respectively, and raised the target price to $14.88, reaffirming our buying rating. The main point supporting the ratings is that net profit for the first half of the year has already exceeded 9% for the whole of last year, and low land costs have contributed to a continued high rise in gross margin. Operating income for the first half of the year was 4.1 billion yuan, up 36% year on year; net profit was 140 million yuan, down 9% year on year, but it has increased 9% from 130 million yuan last year; gross margin and net profit margin were 73.8% and 35%, up 1.9 and 17.6 percentage points respectively. Low land costs drove a further increase in gross margin; high gross margin drove a sharp rise in land tax, driving sales tax and surcharges of 324% year on year, accounting for operating income rising from 6.8% the previous year to 21.3%; the three expense rates rose from 6.8% last year to 21.3%; the three expense rates were up from the previous year The increase of 12.8% to 18.7% stemmed from Oren's merger and the cessation of interest capitalization on some projects, which led to an increase in management expenses and financial expenses, respectively. At the end of the reporting period, the debt ratio and net debt ratio fell to 47% and 48% respectively, far below the industry average. The instrument and electronics department is the only real estate platform and the only platform that has not been reorganized. There is plenty of room for suspension of trading and restructuring and integration. According to Yidian's strategic adjustments, the company has transformed into commercial real estate since 2009. Currently, it is the only real estate platform under the I&E department, assuming the role of smart city property bearer. It is expected that in the future, it will gradually take on a large number of core industrial land in Shanghai to achieve an important role in revitalizing the I&E sector's assets. Moreover, Huaxin Real Estate, the majority shareholder has also promised many times to complete the resolution of competition issues in the industry by the end of 17. Currently, the company has suspended trading and entered the restructuring process on August 25. Currently, the company has also been suspended on August 25 and has entered the restructuring process. According to Huaxin Co., Ltd. and Feilo Audio's suspension announcement, on the other hand, it is predicted that Huaxin Co., Ltd. will be the key target of the restructuring; on the other hand, The past few years China, judging from the three platform restructuring plans of Yidian Electronics (injecting Yunsai assets, changing to Yunsai Zhilian), Feilo Audio (introducing two private shareholders, transforming the LED business), and Feiluo Shares (introducing major private shareholders, changing the name to China Consumer), the restructuring plan of Yidian is relatively flexible and ahead of schedule, and the company, as the only platform in the I&E department that has not been reorganized, does not rule out subsequent plans or performance exceeding expectations. The company's land reserves are of high quality and have a valuation of 5.5 to 6.6 billion yuan. The increase in land acquisition in the past three years has contributed to the reversal of this year's performance. The company has interests of 1.02 million square meters of commercial real estate (development of 890,000 square meters, holding 130,000 square meters), mostly located in Shanghai. The company acquired land by undertaking instrumentation and electrical industrial land and equity acquisitions. Land acquisition costs were low, and in the face of rising land prices in Shanghai, and the gross development margin exceeded 60%. We used the net profit discount method for the valuation of opened properties, the cash flow discount method, and the rental return method respectively. RNAV was 5.5 to 66 billion yuan, providing a certain margin of safety; on the other hand, the company's 10-13 years of land acquisition led to a decrease in marketability. Cause 14- Performance declined in 2015, and the pace of land acquisition was adjusted in 14-16, and the average annual land acquisition volume increased 3-5 times, driving a reversal in sales and performance after 16 years. The compound growth rate of performance in 16-18 is expected to reach 41%. Furthermore, subsequent asset injections by major shareholders will further strengthen the judgment of reversal in performance. The main risk faced by ratings was that sales fell short of expectations; asset integration between the company and major shareholders fell short of expectations. As a valuation, we maintained the company's earnings per share in 2016-17 at 0.34 and $0.50 respectively. The target price was raised from $13.74 to $14.88, reaffirming the buying rating.