1. Overview of events Xinhualian released its 2017 annual report. The company's revenue for the full year of 2017 was 7.441 billion yuan, a decrease of 0.99% from the same period last year; net profit was 857 million yuan, an increase of 63.63% over the same period last year. 2. Analysis and judgment The real estate business continues to advance and consolidate the foundation for future development. During the reporting period, the company achieved a contracted sales area of 887,700 square meters, a sales amount of 10.334 billion yuan, a settlement area of 754,800 square meters, a settlement amount of 6.142 billion yuan, and a settlement amount of 6.142 billion yuan. The gross margin of the real estate business increased 2.8 percentage points to 34.1% year on year. The company added 1.2011 million square meters of land and a planned construction area of 1,2875 million square meters during the reporting period through bidding and equity acquisitions. The continuous advancement of the real estate business has also laid a solid foundation for the company's future development. Actively broaden financing channels and ensure the smooth transformation of the company. The company actively expands diversified financing methods. A special property asset support plan was established in July 2017; New Silk Road Cultural Tourism, a holding subsidiary of the company, completed a stock offering of 916 million shares during the reporting period. The company's application for the non-public issuance of corporate bonds has obtained a letter of no objection from the Shenzhen Stock Exchange, and the company's medium-term note registration application has received a notice of acceptance from the China Interbank Market Dealers Association. The expansion of financing channels has provided a solid guarantee for the smooth transformation of the company. Strategic transformation is progressing comprehensively, and the cultural tourism industry under the Cultural Tourism and Finance Collaborative Development Company achieved an important breakthrough in 2017. The first phase of the Changsha Tongguanyao project, a national tourism priority project, is expected to open within the year, and multiple business formats of the second phase of the project are being actively promoted at the same time; the first cultural tourism project, the east bank of Jiuzi Ancient Town in Wuhu, has been fully opened, the west bank has been fully completed, and the Ocean Show has been put into trial operation. Xinhualian and the controlling shareholder Xinhualian Holdings established a joint venture to establish Xinhualian Children's Park Co., Ltd., and construction of Xining Children's Dream Park has already started on a large scale. In terms of financial business, as of the end of the reporting period, the company held 9.40% of the shares of Bank of Changsha, which is its second largest shareholder; the Asia Pacific Reinsurance Company, which participated in the establishment of the company, is awaiting approval from the Insurance Regulatory Commission; and New Silk Road Cultural Tourism has acquired 100% of Shenzhen Youwo Finance's shares by issuing shares to purchase assets. In the future, the company is expected to invest in other high-quality financial assets in a timely manner through investment, mergers and acquisitions, etc., to promote the company's leapfrog development in the financial field. 3. Profit Forecast and Investment Suggestions Xinhualian's real estate business will develop steadily in 2017, actively expand financing channels, and comprehensively promote the strategic transformation of “cultural tourism+real estate+finance”. Future development can be expected. The predicted EPS for 2018-2020 was 0.59 yuan, 0.73 yuan, and 0.87 yuan, respectively, and the corresponding PE was 9.9 times, 7.9 times, and 6.6 times, respectively. The company's highest PE value, median value, and the lowest PE value in the past three years were 81.8 times, 43.9 times, and 12.9 times, respectively, giving it a “highly recommended” rating. 4. Risk warning: The real estate industry's regulatory policies have been tightened, and the transformation progress has fallen short of expectations.