The substantial increase in revenue led to an increase of 56% to 4.03 billion yuan: in the first half of 2021, the company recorded a net profit of about 4.03 billion yuan, an increase of 56% over the same period last year. The substantial increase in performance is mainly due to: 1) the company's operating income increased by 85% to 28.84 billion yuan, of which property management service income increased by 60% to 13.8 billion yuan, and community value-added service income increased by 92% to 3.33 billion yuan. Non-owner value-added service income increased by 95% to 2.68 billion yuan, while "three supply and one industry" income increased by 38% to 3.7 billion yuan compared with the same period last year, while urban service income increased by 4.53 billion yuan, an increase of 41 times compared with the same period last year. 2) the gross profit increased by 67% to 8.86 billion yuan, and the gross profit margin was 30.7%, down 3.3% from the end of last year. The decline in gross profit margin is mainly due to the cancellation of social security relief policy, increased intelligent transformation of infrastructure and a significant increase in the share of urban service revenue with low gross margin. In addition, the company's expense rate fell to 12.5% from 13.4% in 2020.

M & An and brand development have brought about a substantial increase in management area, with third parties contributing more than related parties: in 2021, the company added a new fee management area of 388 million square meters, of which about 7200 million came from related parties and 3800 million from brand extension. From the collection and acquisition of about 278 million parties, the new third party fee area accounted for 81%. By the end of 2021, the contract management area of the company has reached 1.44 billion square meters, and the fee management area has reached 770 million square meters (excluding "three supplies and one industry" business). The proportion of fee management area from third-party developers has increased from 27% to 55%. The contribution exceeds the fee-charged area of related parties. Strong brand expansion, mergers and acquisitions and the endogenous growth of Country Garden Holdings Group continue to promote the rapid expansion of the company's management scale.

The strong growth of community value-added business, the improvement of the profit quality of "three supply and one industry" and the opening of a new channel for business writing business: by the end of 2021, the company's community value-added service revenue and gross profit have recorded substantial growth. Among them, the growth rate of income from community media services and local life services has more than doubled, reaching 179% and 107% respectively, and the contribution to the overall gross profit has risen to 22.7%, becoming an important driver of profit growth. "three supplies and one industry"

To achieve the goal of "stable in one year, smooth in two years, and solid in three years", we have achieved phased results in operational efficiency through market expansion, quality management, intelligent reduction and community value-added services, and the gross profit margin has increased from 7% to 11.6%. During the period, the company accepted the business management service section of Country Garden Holdings Group and opened a new channel for business writing. The office business covers an area of more than 2000 square meters and has more than 200 projects. There are more than 100 shopping center projects providing commercial operation services, with an area of more than 5 million square meters under management and a reserve of more than 3 million square meters for light asset operation projects.

Target price of HK $58.0 and maintain buy rating: the company will expand its regional layout and increase the density of regional projects through mergers and acquisitions during the period of industry consolidation in 2021, which will help to enhance business scale and optimize cost management. The company's rich experience in M & An integration and scientific and complete system will help the company to quickly complete the post-investment management integration in the future, achieve the goal of improving quality and efficiency, and further consolidate the company's leading position in the industry. We estimate that the company's parent net profit for 2022-2024 will be 5.9 billion yuan, 9 billion yuan and 11.8 billion yuan respectively, with a target price of HK $58.0 at 25 times earnings in 2022.