1. Incident: The company announced its 2012 annual report: achieved operating income of 767.166 million yuan, net profit attributable to shareholders of listed companies of 74.254 million yuan, a year-on-year decrease of 47.36%, equivalent to earnings per share of 0.10 yuan; net assets attributable to listed shareholders were 1.98 yuan per share, a year-on-year decrease of 4.35%. 2. Our analysis and judgment (1) Performance settlement fell short of expectations. Judging from the annual report published by the company and our research data, the 2012 settlement focused on the Qingyuan Century City residential project (280 million yuan), the Wuhan Lijingwan project (310 million yuan), and the Shangyu Tianxiang Huating project (82.5 million yuan). The company's final settlement revenue and performance in 2012 fell short of our expectations, mainly because sales of the Tianxiang Huating Project in Shangyu fell short of expectations, which ultimately led to insufficient performance release. (2) Sales in 2013 can still be expected to fall slightly below expectations for the 2012 Wolong Real Estate Project, but some projects also sold well, such as the Wuhan Lijing Bay Project and the Qingyuan Century City Project, which are targeted at rigid demand, while the Shangyu project is not ideal due to the desolation of the local property market. In 2013, we think sales of Wolong Real Estate can still be expected. The main reason is that the 2013 promotion focus is still on the much-needed Wuhan Lijingwan Project, Qingyuan Project, and Tianxiang Huating Project; at the same time, the new project, the Wuhan Ink Lake Project, will also be launched, contributing to sales performance. 3. Investment recommendations According to our research and tracking of Wolong Real Estate projects, in 2013, Wolong Real Estate's performance mainly came from Shangyu Tianxiang Huating, Qingyuan Century City, and Wuhan Lijingwan projects; at the same time, the company's 2012 annual report showed that the 2013 settlement was 1.3 billion yuan and the cost was 1,085 billion yuan. However, due to insufficient pre-sale payments, we expect Wolong Real Estate's settlement revenue in 2013 to be 1,294 million yuan, and realized net profit attributable to shareholders of listed companies of 144 million yuan, equivalent to earnings per share of about 0.20 yuan. According to performance forecasts, the current stock price corresponding to 2013's dynamic PE is 17.3 times, and the NAV valuation is 5.3 yuan/share, which is 35% off. With the positioning of products in rigid demand for new market entry projects and the improvement of the sales situation, Wolong Real Estate's sales performance may be good; at the same time, the current NAV discount rate is not low. Overall, careful recommendations are given.