The overall performance is growing rapidly and profitability remains stable. In the first half of 2021, the company achieved revenue of 30.07 billion yuan, an increase of 34.8% over the same period last year; gross profit margin of 30.9%, compared with 33.8% of the same period last year; total core profit of 3.93 billion yuan, an increase of 28.9% over the same period last year; and net profit of 3 billion yuan, an increase of 8.5% over the same period last year. covered by the advantage in the land acquisition model, the company's gross profit margin remained at a high level in the first half of 2021, which has a certain advantage over its peers. In terms of expense rate, the company's SG&An expense rate decreased by 1.7% to 7.3% in the first half of 2021 compared with the same period last year. However, due to the increase in the profit and loss ratio of minority shareholders (21HI is 76 million yuan, 20H1 is a loss of 410 million yuan) and other reasons, the company's net profit growth rate is slower than the total profit growth rate. On the whole, the company achieved steady growth in the first half of 2021; with the continuous release of high-quality land storage values such as the old reform, the company's operating performance is expected to continue to grow.

The advantage of acquiring land has been continuously strengthened, and the old reform projects have continued to be realized. The company continued to maintain the advantage of diversified acquisition of land in the first half of 2021, with 2.46 million land rights and interests built during the period, of which the proportion of urban renewal and mergers and acquisitions were 33% and 22% respectively, and about 63% were distributed in the Dawan area. The total consideration of the company's new land reserves in the first half of the year is about 34.5 billion yuan, and the corresponding value of the corresponding goods is about 103.1 billion yuan. According to the equity consideration, the proportion of first-tier cities reaches 50%, and the cost of acquiring land is controlled reasonably. By the end of the first half of 2021, the total value of the company's land storage reached 734.66 billion yuan, an increase of 9.6% over the end of 2020, of which first-tier cities accounted for 54%. Except for the old reform projects included in the land storage, the company did not include the old land storage projects covering an area of 53.7 million square meters at the end of the period. the corresponding salable area is expected to reach 110 million square meters, of which Shenzhen and Guangzhou account for about 70% of the potential saleable area. Abundant and reasonable land reserves can effectively support the company's future growth and profitability.

The red line index reaches the target quickly, and the financial management remains active. Thanks to good sales and active financial fund management, the company's total cash and deposits reached 48.736 billion yuan at the end of the first half of 2021, an increase of about 3.4% over the end of 2020. At the same time of rapid development, the total amount of the company's interest-bearing liabilities remained stable, the cash short-debt ratio at the end of the period was about 1.53 times (at the end of 2020: 1.56 times), the net debt ratio continued to drop by 2.4 pet to 93.7% compared with the end of 2020, and the leverage level continued to decline. By the end of the first half of 2021, the asset-liability ratio of the company excluding accounts received in advance was about 69.9%, and the "three red lines" indicators all turned green. With the continuous release of the value of high-quality resources, the company's financial situation is expected to continue to improve in the future.

The financial situation continued to improve, with ample land reserves supporting growth and maintaining a "buy" rating. Taking into account the changes in market conditions, we lowered the company's profit forecast for 21-23 by 2.2%, 2.1% and 1.3%, and predicted that the company's core EPS for 2021-2023 was 1.06,1.29 and 1.56 yuan, respectively, an increase of 22.4%, 21.4% and 21.3% over the same period last year. At present, the layout of the company is high-quality, and the cost of land storage is reasonable. Taking into account the valuation pressure of the industry as a whole, the 55 per cent target NAV discount is given and the target price is adjusted by 13 per cent to HK $4.70, corresponding to 4.6 times PE in 2021, which is up to 105 per cent of the current price. (the latest share price is the closing price on August 25, which has been adjusted using the latest total equity when calculating valuation indicators and EPS growth.)