The resources of state-owned enterprises are superimposed, and their performance has turned a loss into a profit. The company achieved operating income of 2.89 billion yuan in the first half of the year, an increase of 3.2% over the previous year; it achieved net profit of 70 million yuan, turning a loss into a profit. The main reason for turning losses into profits is that the company's gross margin for the first half of the year increased by 2.6 percentage points to 11.0% compared to the same period last year, while at the same time receiving investment income of 2.774 million yuan. In August 2021, the actual controller of the company was changed to the Zhuhai State-owned Assets Administration Commission. Using the advantages of state-owned assets, it helped the company focus on the two major businesses of “big transactions” and “big assets” and continuously improve the company's asset transaction management capabilities.

Digitalization empowers large trading sectors and helps steady growth in transaction revenue. The company achieved large transaction service revenue of 2.15 billion yuan in the first half of the year, an increase of 12.3% over the previous year, and its share increased from 69.6% in the first half of 2020 to 75.8% in the first half of 2021. Looking at business segments, agency sales revenue, Internet+ business, and financial services business revenue were 1.11 billion yuan, 92 million yuan, and 130 million yuan, respectively, with year-on-year growth rates of -10.7%, 65.5%, and 22.8%, respectively. Judging from the revenue share of each business, the share of agency sales revenue, Internet+ business, and financial services business revenue was 51.7%, 42.6%, and 5.7% respectively, with changes from the same period last year -13.9 pct/13.4 pct/0.4 pct, respectively.

The big asset management business has returned to an asset-light operating model and focuses on B-side and G-end service capabilities. Due to the company's divestment of the asset-heavy apartment business, the large asset management business segment achieved revenue of 690 million yuan, a year-on-year decrease of 17.68%, and its share increased from 30.4% in the first half of 2020 to 24.2% in the first half of 2021. Among them, the space operation business achieved revenue of 280 million yuan, down 16.5% year on year due to the divestment of the heavy asset business, and its share of large asset management business revenue fell from 57.1% in the first half of 2020 to 41.1% in the first half of 2021; the urban asset management business achieved revenue of 320 million yuan, up 12.7% year on year, and its share of large asset management business revenue fell from 33.0% in the first half of 2020 to 46.0% in the first half of 2021.

Maintain buy ratings. We believe that on the basis of digitally operating large trading business and returning to asset-light operation and large asset management business, the company will have a relatively steady increase in revenue and profit in the future. We maintain our profit forecast for 2021-2023, and EPS is 0.13/0.14/0.15 yuan, respectively.

Risk warning: The decline in transaction services exceeded expectations; the development of property management fell short of expectations.