Core views:

1. The main business is the main driving force. Both operating income and profit increased year-on-year in the first half of 2021. Operating income was 6.23 billion yuan, up 45.5% year-on-year from the first half of 2020. The gross profit margin and net profit margin were 24.2% and 8.4% respectively, up 0.9 percentage points and 2 percentage points from the same period in 2020. Revenue from the main business of real estate and property services increased 48.4% year on year, and gross profit margin increased 3.77 percentage points, which was the main driving force behind corporate revenue and profit growth.

2. The “three red lines” changed from green to yellow, and the overall situation is still relatively stable

As of the first half of 2021, the net debt ratio, balance ratio after excluding advance receivables, and short-term cash debt ratio were 58.5%, 69.5% and 0.9 times respectively, up 10.2 percentage points, 0.4 percentage points and 0.3 times respectively from the end of 2020. As the short-term cash debt ratio fell below 1 times, stepping on a line turned yellow. At the same time, its debt structure was optimized, and the share of short-term debt fell to 31.9% from 33.2% in 2020.

3. Maintaining advantages in traditional sectors+continuing expansion in new fields, with property spin-offs and listings in sight

Higashihara Hitoshi Service continues to maintain a leading edge in residential property services in traditional fields, and continues to increase its expansion to achieve coverage in various fields and business formats. A statement was submitted to the Hong Kong Stock Exchange during the period, and the spin-off listing of the property is expected.