The company released three quarterly reports: ① 18Q1-3: realized revenue of 6.168 billion yuan / + 66.51%, net profit of 306 million yuan / + 25.14%, deducted non-net profit of 313 million yuan / + 176.20%; ② 18Q3: realized revenue of 3.202 billion yuan / + 115.71%, net profit of 175 million yuan / + 199.81%, deducted non-net profit of 184 million yuan / + 210.41%

Hunan overseas consolidated table promotes a substantial increase in income, which is not due to the high performance or the increase in real estate settlement + investment income. Benefiting from the project carry-over income and the acquisition of Hunan overseas, the company 18Q3 achieved revenue of 3.202 billion yuan / + 115.71%. The 18-year Q3 gross profit margin is 34.13%, which is 2.38pct higher than the same period last year; the sales expense rate 7.03%/-0.79pct (mainly due to the increase in project sales); the management expense rate 6.88%/-0.03pct (mainly due to the increase in interest on the completion of the project); the financial expense rate 6.88%/-0.03pct (mainly due to the increase in interest on project completion expenses); the total decrease in 3.92pct during the period The net income of 18Q3 investment was 126 million yuan, an increase of 81.13 million yuan over the same period last year, which is estimated to be mainly the investment income brought by the successful listing of Changsha Bank at the end of September. 18Q3 realized net profit of 175 million yuan / + 199.81%, deducting non-net profit of 184 million yuan / + 210.41%.

Tongguanyao scenic spot is very popular on National Day, and the transformation of the company's culture and tourism continues to advance. ① Tongguanyao scenic spot: the company's Tongguan kiln in Changsha officially opened on August 28 this year. According to the company's official Wechat, the total number of visitors to the park during the National Day was nearly 100000. The scenic area's business model includes rich forms of business such as tickets + hotel + catering + performing arts + shop rent. It is expected that the settlement of relevant commercial real estate in the early stage will help the company quickly withdraw cash flow and increase profits. The follow-up will bring considerable sustainable business performance after the maturity of the scenic spot. ② Old Town: according to the 18 and a half annual report, following the full opening of the streets on the east coast, the ocean show was officially opened during the reporting period, and the west bank of the town has been fully completed. We believe that the completion of the construction of the east and west banks of the ancient town is expected to prepare for the closure of the park, and the expected strengthening of the overall collection of tickets in 19 years will be beneficial to the release of the performance of the scenic area. ③ Xining Children's Dream Park: according to the announcement, the project is expected to be put into trial operation in 2019 and will become a new landmark for parent-child tourism vacation in Northwest China; ④ Korea Fairview Villa: it has been approved by the local Taoist Council in the first half of 18 years and is carrying out preparatory work in an all-round way. ⑤ real estate business: the company's real estate business will continue to focus on first-tier and hot cities in the future, but it is expected that the acquisition of land in the nature of pure real estate will slow down in the future, and more funds and resources will gradually be transferred to the cultural and travel business. Considering the large demand for cash flow in the early stage of the cultural travel project and the long training cycle, in the short and medium term, we expect the real estate business to continue to provide performance support and cash flow for the company.

Investment advice: buy-An investment rating. Over the past 18 years, the company has made steady progress in projects such as Wuhu Jiuzi Ancient Town, Tongguanyao in Changsha and Xining International Holiday Village, and the business of "Culture, Travel and Finance" is expected to enter a continuous harvest period. It is estimated that the return net profit of the company from 2018 to 2020 is 10.9 + 13.1 / 1.57 billion, EPS is 0.57 + 0.69 + 0.83, and PE is "6.9x/5.7x/4.8x" respectively.

Risk tips: 1) the passenger flow of the scenic spot project is lower than expected; 2) financial capital risk; 3) overseas business risk; 4) real estate policy change risk.