Incident review On April 8, 2016, the company released its 2015 annual report. The company achieved total operating income of 2,409 billion yuan, +13.43% year-on-year; total profit of 151 million yuan, -0.29%; and net profit attributable to shareholders of listed companies was 128 million yuan, +12.40% year-on-year. Tongzhou Imagination Space has greatly benefited from the construction of a sub-administrative center in Beijing and the establishment of the Universal Studios project, and the future performance of the company's Beijing Wuyi Garden project is huge. According to Chainjia's March data, the current average price of second-hand housing in the Wuyi Garden business district is 29,900 yuan/square meter (average price of second-hand housing in Tongzhou is 32,900 yuan/square meter), the price is +5% over month (+7.53% month-on-month in Tongzhou), and the transaction price of individual units in Wuyi Garden Lily Garden exceeds 50,000 yuan/square meter. We raised the opening price target for the first phase of Wuyi Garden South Area to 50,000 yuan/square meter. We expect the potential value of the Wuyi Garden South Area project to be around 35 billion yuan. Currently, the section where the project is located is basically mature, and there is no space for additional residential land. The scarcity of the project is obvious. The Universal Studios project is located in Liyuan Town, Tongzhou, with a total investment of over 50 billion yuan. It is expected to officially open in 2020. Referring to housing price trends surrounding the Shanghai Disney project, it can be seen from Figure 1 that prices in blocks surrounding the Shanghai Disney project all benefited from this project. In the Zhangjiang area closest to Disneyland, second-hand housing prices rose nearly 70% from 2012 to 2015. The Wuyi Garden South Area project is about 7 kilometers in a direct line from Universal Studios, so future sales are expected to benefit directly. Although Tongzhou's purchase restriction policy has had a certain impact on the real estate market, in the long run, we believe that Tongzhou's regional development has a clear driving effect on property appreciation, and future sales performance of the project can be expected. Based at home, moving internationally has benefited from the recovery of the commercial housing market in second-tier cities. The pre-sale and sales of commercial housing in 2015 was +180% over the same period last year. The company has a second-tier core region, with gross margins of projects in Nanjing, Fujian (no projects in Fuzhou), and Jiangsu all exceed 20%. Because the city policy is still in the tone of regulation. In the context of easing credit policies, various local governments have introduced favorable policies one after another, which are beneficial to housing sales in hot second-tier cities. The company is deeply involved in Africa and is expanding its engineering contracting business with Kenya as the center. In 2016, it plans to sign 18-20 new contract contracts, with a contract value of about 2.2 billion dollars. International engineering construction is another main business of the company. Under the country's “Belt and Road” strategic layout, overseas business is expected to make a breakthrough in undertaking major projects in 2016. Risk warning Risk warning: (1) The rise in housing prices falls short of expectations; (2) the foreign exchange rate fluctuates; (3) the policy falls short of expectations, profit forecasts and investment suggestions. We believe that we will benefit from the construction of the Beijing Municipal Government Sub-Center and the implementation of the Universal Studios project. As the Wuyi Garden South District project progresses, the company's future performance will improve markedly. It is estimated that the company's EPS for 2016-2018 will be 0.42/0.72/1.00 yuan, respectively, giving it a “highly recommended” investment rating.