1H17 core NP in line with expectation
　　Sino-Ocean Group Holding Limited announced 1H17 results:revenue was Rmb17.3bn, up 85% YoY; core net profit wasRmb1.52bn, up 59% YoY, with a core diluted EPS of Rmb0.2.
　　Lucrative dividend payout. The firm announced a HK$0.17interim dividend, implying 4% dividend yield and 40% payoutratio based on attributable NP. We expect FY17/18e dividendyield to reach 7.6%/9.2%.
　　Superior land reserves. Sino-Ocean has 20mn sqm attr. landbank, almost all in core tier-1/-2 cities. The average land costwas around Rmb6.8k/sqm （about 34%, as of pre-sales ASP）。
　　Defensive with strong B/S. In 1H17 net gearing was 62.5%and the effective interest rate was 5.1%.
　　Trends to watch
　　Rmb70bn/100bn 2017/18e sales target announced,backed up by Rmb80.7bn/>160bn saleable resources in2H17/FY18.
　　Margin to recover. We expect GPM to rise to 25.6%/26.6% in2017/18e, as pre-sales GPM ranges 25~27%.
　　Earnings forecast
　　Raise FY17/18e core NP forecast by 11%/18% toRmb3.7bn/4.8bn due to accelerating delivery of its premiumresources.
　　Valuation and recommendation
　　The stock is trading at 7.2x/5.5x 2017/18e P/E and 50% discountto 2017e NAV. Raise TP by 15% to HK$5.08 due to revisedup growth, implying 25% upside. New TP is at a 50% discount to2017e NAV and 8.9x 17e P/E.
　　Risks
　　Sales targets miss.