The company released its interim results for 2021. The company achieves steady scale development while maintaining low financing costs. And optimize the growth quality of the company in the two aspects of investment and operation, on the one hand, maintain rational access to land and emphasize the expansion of both importance and importance, on the other hand, attach importance to the fine operation and quality improvement of commercial projects. The company's core assets are of high quality and strong realizability, and the current PB is only 0.5%. We are optimistic about the investment value of the company.

In the first half of the year, the company's performance developed steadily and the core indicators improved. The company released the first half of 2021 results, the first half of the company achieved operating income of 11.9 billion yuan, an increase of 30% over the same period last year The net profit of shareholders belonging to listed companies was 1.14 billion yuan, an increase of 10% over the same period last year. In terms of profit margin, the gross profit margin increased by 3.2 percentage points to 38.6% over the whole of last year, the net profit rate increased by 2.5 percentage points to 9.6% over the whole of last year, and the profit and loss ratio of minority shareholders accounted for 47.5%, slightly lower than that of 20 years. It is expected to maintain the level of about 50% in the future.

The growth rate of sales is in line with expectations and is expected to successfully achieve the target for the whole year. In the first half of the year, the company signed a sales contract of 16.6 billion yuan, an increase of 77% over the same period last year, an increase of 36% over the same period in 2019, and 44% of the annual sales contract target, and the progress of the annual target was 9% higher than that of the same period last year. The sales value of the company in the second half of the year is 45.4 billion yuan, and 92% of the sales value in the second half of the year is in second-tier or above cities, with abundant goods value and reasonable regional structure, and the annual sales target can be achieved by reaching a removal rate of 47% in the second half of the year.

The operating business has benefited from the relief of the epidemic and the improvement of operational quality, and the recovery is strong. The company achieved 653 million yuan in rent management fees in the first half of the year, an increase of 29% over the same period last year, a four-year high in the same period On the commercial side, in the first half of the year, the sales and passenger flow of the project increased by 61% and 86% respectively compared with the same period last year, and the rental rate increased by 5% to 94%. Two new commercial projects performed well. In terms of office space, the company strengthened its fine service standards and calmly responded to the peak supply of the market. The rental rate increased by 7 percentage points to 82%, and the occupancy rate of 4 of the eight office buildings in the camp exceeded 90%. The company said it will continue its efforts to increase the office occupancy rate in the second half of the year, and strive to reduce the overall vacancy rate of commercial projects in operation to less than 5%.

Take the land carefully and rely on the ability to expand the assets. The company added three new TOD project plots in the first half of the year, two of which are taken at rock bottom prices, and the net profit rate of sales is expected to reach about 15%. The company currently has a land reserve of 1892 million square meters, which can support 2-3 years of operation, and the abundant granary also provides a guarantee for the company to remain calm and rational in the acquisition of land. On the commercial side, the company's current total management volume of 8.2 million square meters is 3.2 million square meters in the camp and 5 million square meters under construction, and projects under construction will enter the market in the next 3-5 years. At the same time, the company's commercial light asset investment force, the current management of the number of third parties has reached 8 (signed 6 at the end of 2020), and plans to account for more than 20% of independent third-party projects in 2023. Under the rational emphasis on asset investment and the light asset expansion, we are optimistic about the optimization of the quality of the company's profit growth.

Risk factors: due to business positioning, housing accounts for less in the company's sales of houses, and the sales certainty will be slightly less in the more volatile market. The possibility that some of the company's business operations will be affected by the epidemic.

Steady development and optimized quality. The company has achieved steady scale development while maintaining low financing costs (5.20% in the first half of the year). And optimize the growth quality of the company in the two aspects of investment and operation, on the one hand, maintain rational access to land and emphasize the expansion of both importance and importance, on the other hand, attach importance to the fine operation and quality improvement of commercial projects. We maintain the company's 2021-23 EPS forecast of 0.69 EPS 1.12 yuan per share, the company's core assets are of high quality and strong realizability, we use the valuation method of PB, and maintain 1 times PB in 21 years, corresponding to the target price of 7.5 yuan per share, the current PB is only 0.5 times, we are optimistic about the investment value of the company and maintain the "buy" investment rating.