Description of the event: In May 2013, we conducted research on Tianchen Co., Ltd. and exchanged information with executives about the company's projects and short to medium term development. Key investment points: 1. Real estate business during the lull period: The real estate business's contribution to the company's performance is getting weaker and weaker, mainly due to a decrease in carry-over projects. In the context of real estate market regulation, the company's real estate business expansion momentum is insufficient. Currently, the main reserves are mainly 400 acres of land in the logistics park in Zhuanqiao, Minhang, Shanghai, the urban village renovation project in the South Yinhe Community, and agricultural land in 3 neighborhoods of Chaoyang Farm in Nanhui. The company plans to once again change the nature of the land used in Block A of the Southern Logistics Park to “residential+commercial”. Currently, the changes are still being coordinated with the government. The rest of the land in the logistics park is industrial land, with a land area of about 200,000 square meters (estimated based on the total area of 400 acres minus plot A). It is expected that the company will also gradually change the nature of the land. The nature of the land has changed, and the company is required to repay part of the land concession fee, but it is cheaper than participating in the bidding. We use the revenue method to revalue the land value after the change, which has a higher premium than the book. The project has been the main source of revenue for the company's real estate business in recent years. There are 302 acres of land use rights in 3 neighborhoods of Chaoyang Farm in Nanhui. The nature of the land is agricultural land. The 2006 annual report shows that the land has a book value of more than 30 million yuan, an average of about 150 yuan/square meter, and the cost is low. As land in Shanghai becomes available, the company is likely to sell the plot. Judging from the average land sale price in Shanghai, the value-added rate of this plot is not low. The relocation process related to the Shijiazhuang urban village renovation project is relatively slow, and the company strives to start construction by the end of the third quarter of 2013. The project is very large and is expected to generate revenue in 2014 or later. Overall, the company's real estate projects in 2013 have not yet entered the settlement period, and the performance is still a relatively lackluster year. The company is awaiting policy dividends, and results in 2014 or later are expected to be released quickly. 2. Equity investment - Greenland's listed equity has greatly increased in value: The company holds 2.95% of Greenland Group's shares. Greenland will go public on the Hong Kong Stock Exchange Stock Exchange (00337.HK). If Dat Xanh successfully injects capital, the company's equity will greatly appreciate. Let's simply calculate the market value: the average market sales rate of Zhaobao Wanjin at the end of 2012 was 0.97 times, PB was 1.55 times. According to Greenland's 2012 sales volume of 103 billion yuan, the estimated market value after listing was about 98.26 billion yuan. Tianchen held 2.95% of Greenland's shares, and the corresponding market value was 2,897 billion yuan. Excluding initial investment costs, the value added of shareholding is still no less than 2.5 billion yuan. 3. Passenger transport business - no short-term divestment plan: Currently, the subordinate taxi business is operating normally, with about 300 taxis. The business can provide a continuous and stable cash inflow and is in a profitable state, and the company has no plans to dispose of the business. It is worth noting that taxi licences have risen from the cost price of 158,000 yuan to 400,000 yuan, with a significant valuation premium. 4. Venture capital business - Acquisition of shares in Ruiyi Pharmaceutical: In August 2012, Shanghai Chenqian Investment, the company's equity investment platform, transferred 15% of Shanghai Ruiyi Pharmaceutical's shares in cash for RMB 10.5 million. Ruiyi Pharmaceutical is one of the key investment projects of the Yangpu District Government's venture capital fund. It may be listed on the GEM market in the future. Currently, the company has not yet met the conditions for listing on the GEM market, and is still in the cultivation period. This portion of equity has some potential to add value. 5. Valuation and Profit Forecast The company's net assets for mid-2013 were $3.24 billion, or RNAV $7.09, a 10.5% discount from the current stock price. We expect the company's earnings per share in 2013-2015 to be 0.02, 0.23, and 0.48 yuan respectively. Based on the latest closing price of 6.39 yuan, the corresponding dynamic P/E is 281, 27, and 13 times, respectively. Valuation is not advantageous; we maintain the company's “neutral” investment rating. Risk warning: 1. Short-term performance has no bright spots: Development is only possible after approval of the Southern Logistics Park project. The demolition of the Shijiazhuang project is slow, making it difficult for short-term revenue to increase significantly; 2. The sustainability of the company's real estate business is weak, and operations are facing transformation.