This report is read as follows:

Sunshine will focus on the field of commercial assets and accelerate the digestion and divestiture of traditional residential development business. the company has two development paths in the future, or to enhance the value of the company from the two directions of improving its own performance or purchasing assets.

Main points of investment:

For the first time, the target price is 8.20 yuan, which is 40% more than the current price. The company's EPS on 2016-17-18 is expected to be 0.03yuan, 0.05yuan and 0.06yuan respectively, unchanged from the same period last year, with an increase of 107%, and an increase of 8%. We are optimistic about the performance released by the operation of the company's commercial assets and the withdrawal of mature assets, and the company's main business will gradually return to normal with the increase of occupancy rate and rent. Under the pressure of high financial costs, the company also has the incentive and opportunity to issue shares to buy higher quality assets, thus raising the company's valuation.

We believe that the failure of restructuring has given the company more choices. On the one hand, the company has a high-quality layout of commercial properties in first-and second-tier cities, and good performance can be achieved through the operation or sale of light assets to obtain investment income; on the other hand, the company is still expected to restructure, and there are opportunities and incentives to find more quality resources, so as to enhance the value of the company. No matter which path is chosen, its performance will exceed market expectations.

We expect that there are two paths for the future development of the company, which will enhance the value of the company from the two directions of improving the performance of the main business or purchasing assets. 1) release performance through transformation to light asset business and investment, transformation, operation and withdrawal of existing commercial properties. 2) to enhance the value of the company by looking for higher quality resources and purchasing assets through non-public offerings.

The company has a high margin of safety, estimated that the company's RNAV per share is about 6.91 yuan, the current price is 15% discount to RNAV. The property held by the company has a higher realizable value, which provides a higher margin of safety for the company. As the company's business becomes more formal, the RNAV discount is expected to decrease, and the expectation of asset purchase may even bring a partial premium to the company's RNAV.

Risk hint: the risk of fluctuation in the real estate market and the progress of project destocking is not as expected.