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　　 Changjiang Securities Liu Jun

Turnover is the core of industry competitiveness at this stage.

Since the central government tightened the real estate regulation policy, the housing inventory (especially the inventory in the purchase restricted areas) has risen significantly, and it is difficult for the industry to return to the stage of rapid rise in housing prices. Under the pattern of stable or slightly rising house prices, improving turnover has become the key to stand out in the industry competition.

The company is a typical example of fast turnover in the industry.

Rongsheng's inventory turnover days remained at about 700 days, significantly higher than the industry average of 2500 days. It is one of the fastest turnover companies in the industry. The company has formulated its own standards in project development, requiring 100 days from land acquisition to commencement, and 100 days from commencement to opening. This strict project development speed standard ensures the company's payment collection rate. Under the high-speed payment collection, the company's operating revenue has achieved a compound growth rate of nearly 47%, and the company's high-speed growth will continue under the pattern of fast turnover.

High debt is a catalyst rather than a hindrance to corporate growth.

The rapid growth of the company is also inseparable from the expansion of asset scale through borrowing, but the high debt level has caused concern in the market. First of all, the company's sales collection ability is outstanding. Under the normal operation of the industry, the company does not have the risk of debt repayment. Secondly, even in 2008, the company achieved stable operation by reducing the growth rate of debt. Based on this judgment, we believe that the high debt of the company will not become a burden, but a catalyst for the growth of the company.

The valuation level of the company is reasonable, and the rating of "recommended" is given.

The company's advance receipts in the third quarter reached 11.8 billion yuan, of which the settlement income in the fourth quarter is expected to be about 6.5 billion yuan, and the annual settlement income will exceed 13 billion yuan. It is estimated that the company's EPS in 2012 and 2013 will be 1.11 yuan and 1.54 yuan respectively. At present, the company's stock price is still within a reasonable valuation range. Considering the company's high growth, it is given a "recommended" rating.

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