Key investment points: The company announced its 2015 annual report, achieving operating income of 3.65 billion yuan, a year-on-year increase of 56.9%, and net profit attributable to shareholders of listed companies of 417 million yuan, a year-on-year decrease of 18.0%, achieving EPS of 0.31 yuan, which is basically consistent with the data disclosed in the previous performance report. The company plans to pay a cash dividend of 1.20 yuan (tax included) for every 10 shares. Ping An's view: Net profit after deducting non-net profit grew at a high rate, and gross margin declined steadily: due to a sharp increase in settlement area, the company's revenue increased 56.9% year on year, but due to the transfer of 7.05% of Zhongzhou Holdings shares in 2014, which increased the net profit base by 233 million yuan, the net profit in 2015 fell 18% year on year, and net profit after deduction rose 57.9% year on year. Due to the lower gross margins of the settlement of Changsha and Huiyang, the gross margin for the whole year fell 1.9 percentage points to 34.6% year on year. Due to settlement revenue ($3.65 billion) being greater than the contract amount ($3.20 billion), advance payments at the end of the year decreased by 570 million to 870 million yuan compared to the beginning of the year. The subway cooperation project has entered the harvest period and is expected to increase by 24% in 2016: the company achieved sales of 3.20 billion yuan and a sales area of 310,000 square meters in 2015 (excluding the Jinhui KAPA project with Shenzhen Metro Group, which sold 2.01 billion yuan), a year-on-year decrease of 0.8% and an increase of 1.3%, including a 62.5% year-on-year increase in sales after the subway project. The company's planned sales volume for 2016 was 4 billion yuan, an increase of 24.8% over the previous year. Considering that the company's subway cooperation project Phase II, Changsha Zhenye City Phase II, Dongguan Songhu Yayuan, and Nanning Zhenye Shangfu have sufficient supply, the probability of completing the sales target is high. The pace of land investment has slowed, and debt ratios have increased. The pace of the company's land acquisition investment slowed in 2015, adding only a plot of land in Nanning, covering an area of 13,400 square meters. In March 2016, it won 108 million yuan for land in Ebu Town, Shenzhen-Shantou Special Cooperation Zone, with a construction area of 217,000 square meters. It successfully issued 1.5 billion corporate bonds during the period, with 1.78 billion dollars in cash on hand, 1.53 times the debt due within one year. Short-term debt repayment pressure was less. The net debt ratio at the end of the period was 73.9%, up 23 percentage points from the beginning of the year, respectively. The balance ratio after excluding advance payments was 57.7%, up 5.9 percentage points from the beginning of the year. Profit forecasting and investment ratings. The company's 2016-2017 EPS is estimated to be 0.35 yuan and 0.39 yuan respectively, corresponding to PE 23.3 times and 20.7 times, respectively. As an enterprise directly under the Shenzhen State-owned Assets Administration Commission, the company is expected to benefit from policy dividends brought about by the state-owned assets reform in the future. Maintain a “Recommended” rating. Risk warning: Risk of sales and performance falling short of expectations.