What's new
　　The company entered into an investment agreement withKailong Real Estate and Hengda Real Estate, both subsidiaries ofChina Evergrande （3333.HK）， to acquire ~2.05% of the enlargedequity interest of Hengda Real Estate.
　　Comments
　　Lucrative dividend yield suggested. According to HengdaReal Estate, SZ Investment, as a shareholder, will enjoy dividendyields of 6.2%, 7.8%, and 8.6% over FY17, FY18 and FY19.
　　Safe cash flow and strong balance sheet to be sustained.
　　SZ Investment has to contribute Rmb5.5bn and we believe it canbe easily financed by disposal of third- and fourth-tier cityprojects in May （Rmb5.4bn）。 A healthy net gearing can besustained by end-FY17e, according to FY17e cash flow forecastsexcluding these two transactions）。
　　Share price of SZ Investment is pressure-bearing. Webelieve Evergrande’s A-share back door listing proposal isunlikely to be approved by CSRC soon considering the stricttightening environment of the China property market.
　　Follow-through would bring negative effects to SZ Investment aswell.
　　Valuation and recommendation
　　Maintain BUY and TP at HK$4.50 （21% upside） for its qualityfundamentals and improved land reserve. The firm now trades at9.9x 2017e P/E and a 55% discount to 2017e NAV.
　　Risks
　　Evergrande A-share back door listing fails.