Events. The company publishes its 2016 semi-annual report. During the reporting period, the company realized operating income of 450 million yuan, a year-on-year increase of 1.34 times, net profit belonging to shareholders of listed companies-486 million yuan, and basic earnings per share of-0.52 yuan.

In the first half of 2016, driven by the increase in carryover, the company's revenue increased by 1.34 times, and the company's net profit continued to lose due to the increase in the provision for impairment of accounts receivable. During the reporting period, the start-up area of the company's project was 49900 square meters, a decrease of 31 percent over the same period last year, and the completed area was 5100 square meters. By the end of June 2016, the construction area of the company's real estate project was 890000 square meters. From January to June 2016, the company achieved a contracted sales area of 85500 square meters, an increase of 185% over the same period last year, and a contracted sales amount of 820 million yuan, an increase of 228% over the same period last year. During the reporting period, the company started a total of 499,000 square meters, a decrease of 31 percent over the same period last year; during the reporting period, the completed area was 0.51million square meters; during the reporting period, the company sold a total of 855,000 square meters and signed sales of 820 million yuan, an increase of 185 percent and 228 percent respectively over the same period last year. During the reporting period, Tianjin Hengtai Huijin Financial Leasing Co., Ltd., a subsidiary of the company, signed three financial leasing project contracts and completed an investment of 734 million yuan. During the reporting period, Tianjin Canal City Investment Co., Ltd., a wholly owned subsidiary of the company, cooperated with Beijing Chaoju Investment Management Co., Ltd. to establish Tianjin Wuqing Chaoju Eye Hospital (Medical Co., Ltd.). Tianjin Canal City Investment Co., Ltd. subscribed 6.8 million yuan and held 34% of its equity.

In January 2016, the company transferred three pieces of land reserves and withdrew 2.1 billion yuan. In May 2016, the company transferred the project under construction and withdrew 184 million yuan. In July 2016, Tianjin Songjiang Co., Ltd., a subsidiary of the company, signed a framework agreement on strategic cooperation in smart city with the Management Committee of Jiangxi Fuzhou High-tech Industrial Development Zone and Tianjin Zhuolang Science and Technology Development Co., Ltd. In 2016, the company plans to invest about 2.64 billion yuan, including 2.06 billion yuan for real estate development and 580 million yuan for equity investment. The company's real estate business plans to start an area of 370,000 square meters in 2016, with a completed area of 350,000 square meters, a contracted sales area of 170,000 square meters, and contracted sales of 1.6 billion yuan.

Investment advice: expand financial leasing, health care and equity investment business, and maintain the "overweight" rating. With the help of major shareholder trunk construction and first-level development strength (which helps the company to obtain secondary development projects at low cost), the company's real estate has formed a high-end market model for regional development along the trunk line. In addition to maintaining the competitive advantage in the suburbs of Tianjin, the company also expands non-local projects through the advantage of major shareholders. In the future, the company will attach importance to the balanced development of regions and product types. At present, the company's project reserve rights and interests are 3.37 million square meters, which can meet the development in the next three years. At present, the company is actively expanding into financial leasing, health care and equity investment. At present, the company's RNAV is 8.13 yuan per share. It is estimated that the company's EPS will be 0.02 and 0.02 yuan in 2016 and 2017. Consider the company's business situation, give the company RNAV about 10% discount of the 6-month target price, that is, 7.32 yuan, maintain the "overweight" rating.

Risk hint: the real estate industry is facing regulation and hindrance to corporate transformation.