Event: The company released its 2016 mid-year report. Net profit was 118 million yuan, up 20.82% year on year; operating income was 1,945 million yuan, up 3.71% year on year, and earnings per share were 0.21 yuan. Comment: With the exception of real estate, revenue from various businesses was basically stable. In the first half of the year, the company achieved business revenue of 1,945 million, an increase of 3.71% over the previous year. Revenue from all businesses other than real estate was stable. Among them, real estate business revenue was 276 million, an increase of about 270% over the previous year, mainly because the confirmed revenue of the Longchi Bay project delivered by Zhongbei Shengye increased compared to the same period last year. Due to lower gas sales prices for non-residents and lower gas installation costs for residents, gas sales revenue in the first half of the year fell 6.5% year on year, and construction revenue fell 34.7% year on year. Management expenses, sales expenses, and financial expenses totaled 270 million yuan, an increase of 2.92% over the same period last year. Among them, financial expenses fell 47% year on year, mainly affected by declining interest rates on bank loans. The gross margin of the engineering business was affected by the reduction in installation costs. Judging from the gross margin of the subdivision business, the gross margin of the engineering business decreased by 11% due to the reduction in installation costs. At the same time, the gross margin of real estate and automobile operations was clearly reduced, and the gross margin of other businesses remained stable. Expand and strengthen the energy industry, and promote distributed energy companies to determine the “two-wheel drive” development idea in 2016. In the development plan, in addition to passenger transportation platforms, emphasis is placed on expanding and strengthening the energy industry. In 2015, through group asset injection, the company transformed into a utility gas company, laying a strong foundation for the development of the energy industry. Judging from the current domestic urban pipeline gas market, there is still room for small to medium city gas markets. In addition, active development of end users and distributed energy are important development directions for the company. We continue to be optimistic about the company's gas sector business. Judging from Nanjing's geographical location and economic development prospects, the company's natural gas sales will continue to increase in the future. Urban Construction Group has abundant utility resources, and the actual controller of the company, Nanjing Urban Construction Group, is rich in utility resources. 1) The Group owns water companies. The Ten Rules of Water and the construction of sponge cities have promoted the development of the water industry. 2) The Group accounts for most of Nanjing's bus assets. The new energy bus and taxi business is progressing rapidly across the country. The Urban Construction Group is rich in resources, which helps listed companies increase new profit growth points. The investment suggests that the development strategy of the company after the name change will be more clear. It will focus on the two major sectors of passenger transportation and energy, build an integrated platform for utility resources in Nanjing, give full play to the financing platform capabilities of listed companies, regardless of non-recurring profits and losses. The company's net profit is expected to be 280 million/310 million in 16-17, corresponding to 19/17 times PE, and will continue to be “highly recommended.” Risk warning: natural gas business expansion is lower than expected; asset integration progress is lower than expected; NDRC reform progress is lower than expected