This report is read as follows:

The gross profit margin of the development business is bottomed out, and the soil storage is gradually removed in the early stage, and the high value attribute of self-owned property has been confirmed in the first half of the year, that is, under the impact of the epidemic, the rent of self-owned property has almost not been affected, and the company is still the preferred target under the background of asset shortage.

Main points of investment:

Maintain the holding increase rating and maintain the target price of 11.81 yuan. Revenue increased by 94%, and net profit increased by 90%, falling in the middle of the forecast range, in line with our expectations. The gross profit margin of the development business continued to bottom, and the sales in the first half of the year were lower than expected, and the profit forecast for 2022-2024 was reduced by 0.59 0.66 shock 0.74 yuan (originally 0.60 0.73 pound 0.88 yuan). As the logic of stable cash flow of the company's self-owned property has been verified, the target price is maintained at 11.81 yuan.

The occupancy rate of core properties remained high and rents were hardly affected. 1) the rental rate of major self-owned properties rose against the trend. The financial street center, which contributed 1x3 rent, increased 9pcts to 89%, and rental income increased to 301 million from 258 million in the same period last year. Helen center rental rate increased to 80%, financial street shopping center rental rate remained at 98%. 2) the rental income in the first half of the year is 809 million, and the gross profit margin is 88%. If you add back the 36 million waiver for the epidemic, the rent will be slightly higher than that of the same period last year, and the resilience will be stronger. 3) the rental growth of newly invested properties is slightly lower than expected. It is expected that the income of Ciqikou back Street and Jing'an Rongyue Center will contribute in the second half of the year, and the rental income for the whole year will increase slightly.

Settlement is accelerated, but profit margins are low and are expected to stifle profits. In the first half of the year, revenue from real estate development increased by 119% compared with the same period last year, but the gross profit margin was only 15.1%, which is lower than that of the whole of 2021, and the company's gross profit margin is expected to basically hit bottom. However, due to the large scale of soil reserves in Huizhou, Tianjin and Chongqing, sales declined significantly in the first half of the year, and the settlement profit of the development business in the next two years is still under pressure.

The company is the preferred target for the revaluation of core assets in the absence of assets. Asset shortage deduces that assets with stable cash flow will be valued. In the first half of the year, the company's core location property rental resilience has been confirmed, and there are still nearly 200,000 investment real estate under construction, rent and revaluation income are still flexible.

Risk hint: the growth rate of sales in Zhongcang city is out of control, and the rent is out of control.