Event: the company released the 2021 semi-annual report, with revenue of 73.401 billion yuan, year-on-year + 13.7%, net profit of 6.283 billion yuan, + 19.3%, and core profit of 6.199 billion yuan, + 11.5%.

The decline in gross profit margin is relatively small, and shareholder buybacks show confidence. During the period, the company achieved a gross profit margin of 28.6%, a year-on-year 1.6pct, a decline of 0.7pct compared with the end of the 20th year, and a relatively small decline in the gross profit margin of the current period, maintaining a relative advantage at an absolute level; achieving a net return of 8.6%, a year-on-year + 0.4pct, down 0.8 pct from the end of the 20th year; and a contract debt of 112.89 billion yuan, + 19.3%, at the end of the period. In terms of expense rate, the three fees / revenue during the period is 8.7%, year-on-year + 0.3pct, sales fee / revenue is 7.5%, year-on-year + 1.0pct, sales fee / current sales amount is 3.6%, year-on-year-0.2pct, financial expenses / current operating income is 1.3%, year-on-year-0.7pct. Major shareholders increased their shareholdings in the company by 6.8625 million shares (0.2% of the company's total share capital) from January to July 2021, with a total consideration of about HK $142 million, fully demonstrating their firm confidence in the company's future long-term performance and deep investment value.

Sales have steadily increased precision investment, and non-housing business is growing rapidly. During the period, the company achieved sales of 152.8 billion yuan, + 38.3% compared with the same period last year, and achieved the annual sales target of about 46%, of which the rebate was 116.1 billion yuan, + 30.4% over the same period last year, and the payback rate was 76.0%; the sales area was 861.0 million square meters, + 36.7% over the same period last year; and the average sales price was 17746 yuan per square meter, + 1.2% compared with the same period last year. The removal rate of the company is nearly 50% during the period. In terms of salable value, the company expects the sales value to be 360 billion yuan in the second half of the year, of which the residential category accounts for 72%. In the second half of the year, according to the dynamic removal rate of 49%, the annual sales target of 330 billion yuan can be achieved. In terms of land acquisition, the company took 3.010 million square meters of land during the period,-75.6% compared with the same period last year, with a corresponding value of 57.1 billion yuan; the amount of land acquired was 20.1 billion yuan,-78.1% compared with the same period last year, and the ratio of new projects to goods was 35.2%. The company adheres to the land acquisition standard of 8-10% net profit margin and 25% gross profit margin, and chooses accurate investment in the face of the hotter land market in the first half of the year; the floor price is 6678 yuan / flat,-10.3% compared with the same period last year. Floor price / sales average price 37.6%, year-on-year-4.8pct; land amount / sales amount 13.2%, year-on-year-69.8pct. In terms of land reserve, at the end of the period, the company recorded a total land storage of 7282.7 million square meters, rights and interests land storage of 4420.9 square meters, with a total value of 1.18 trillion yuan, of which first-and second-tier cities accounted for 74%, with a unit price of 5554 yuan per square meter, with sufficient and high quality soil storage resources. In addition, the company's non-room business (hotels, business and entertainment, services) achieved revenue of 6.6 billion yuan, + 128% compared with the same period last year. The company aims to achieve revenue of more than 15 billion yuan in 2021 (+ 73.8% compared with the actual revenue in 2020). The target for the next three years is to achieve an average annual growth rate of more than 20%.

Credit rating raised the financing cost is low, the three red lines are firmly in the green file. During the period, the company was upgraded by S & P to a stable BBB-, outlook (investment grade) and recorded a financing cost of 5.60%, unchanged from a year earlier. In terms of the three red lines, at the end of the period, the company recorded an asset-liability ratio of 68.0% (excluding accounts received in advance), compared with-0.5pct at the end of 20 years; a net debt ratio of 50.9%, compared with the end of 20 + 0.6pct, and remained below 60% for 10 consecutive years; cash-to-short debt ratio (deducting pre-sale regulatory funds) was 1.9, compared with + 0.74 at the end of 20, and the three red lines remained green. In terms of long-and short-term debt structure, short-term debt accounts for 27.0%, year-on-year-1.0pct; long-term debt accounts for 73.0%, year-on-year + 1.0pct.

Investment advice: the company is given a buy rating for the first time. It is estimated that in 2021-23, the company's EPS will be 4.00Unix 4.59max, and the corresponding PE will be 2.54 times as much as 3.34Universe.