Zhongzhou Holdings released its mid-2017 report, with an annual operating income of 3.26 billion, a decrease of 1.85% over the same period last year, and a net profit of 464 million, up 472% from a year earlier.

Sales in the second half of the year need to be improved: the company's gross profit in the first half of the year continued to decline to 25%, a low in recent years, while the sharp increase in net profit was mainly due to the reduction of tax burden brought about by the change in the structure of the current settlement real estate income project and the improvement of self-owned property. In the first half of the year, the sales volume was about 3.121 billion, down 39% from the same period last year, and about 28% of the annual target was achieved. But investment in development rose 56 per cent year-on-year to 2.5 billion yuan, meeting the annual target of 21 per cent. The company's sellable projects in the second half of the year are still mainly concentrated in Shanghai, Chengdu, Huizhou, Qingdao, etc., with an estimated value of more than 20 billion, enough to support the 15 billion target for the whole year, considering the greater pressure of policy implementation in mainstream cities, the sales task in the second half of the year is still full of challenges.

Steadily expand, enter Foshan, Chongqing for the first time: significantly increase the intensity of land acquisition in the first half of the year, enter Chongqing and Foshan for the first time, obtain land resources through bidding, mergers and acquisitions, cooperative development and other expansion means, and achieve an additional land area of 2265,500 square meters, with a volume ratio area of 4957 million square meters, an increase of 635% over the same period last year. While expanding the layout area, we will continue to increase the project layout density that has entered the city, so as to provide project reserves for the company's sustainable development. In terms of debt repayment pressure, the net debt ratio increased due to the increase in long-term borrowing, while the short-term debt pressure improved due to cash inflows.

Entrusted to manage the major shareholder project, the incentive mechanism is further strengthened: the company signed an agreement with Huihai Real Estate to be responsible for the related operation and management of the land development and construction of the Shangsha urban renewal project in Shenzhen. The project is an old reform project under the control of the company's major shareholders, and the company's entrusted management of the project is expected to improve operating income and expand the scale of the company's trading project, which is in line with the company's strategy of "ploughing the city and multi-market linkage". The company's major shareholders have rich resources for old reform in Shenzhen, and we also look forward to further strengthening the resource potential in Shenzhen in this regard. Up to now, the company has implemented follow-up investment in all the newly acquired projects, and has completed 4 projects with good follow-up results, and plans to continue to implement 3 projects. Profit forecast and investment rating: we expect the company's EPS from 2017 to 2018 to be 0.71 yuan and 0.94 yuan respectively, maintaining a "buy" rating.