The operating income of the 1H2018 company decreased by 32.23% year on year, and net profit of the company decreased by 62.87% year on year. The company announced the 2018 semi-annual report: 1H2018 achieved operating income of 1,286 billion yuan, a year-on-year decrease of 32.23%; realized net profit of 34.62 million yuan, converted to a comprehensive dilution of EPS 0.04 yuan, a decrease of 62.87% year on year; and realized net profit of 33 million yuan, a year-on-year decrease of 62.94%. The company's performance fell short of expectations, mainly due to the large year-on-year decline in sales in the commercial real estate business due to the close end of sales in the Lanzhou center, and the decline in revenue from the supply chain management business due to adjustments in commodity business types. Looking at the quarterly split, the company achieved operating income of 607 million yuan in 2Q2018, a year-on-year decrease of 41.73%; net profit of 5.27 million yuan, a year-on-year decrease of 91.64%. The consolidated gross margin increased by 6.37 percentage points, and the expenses ratio for the period increased by 6.43 percentage points, and the consolidated gross margin of the 1H2018 company was 24.61%, up 6.37 percentage points from the previous year. The significant increase in gross margin was mainly due to the increase in contract retention rates for commercial and trade business suppliers, the increase in gross profit for real estate leasing and property management fees, and the higher gross margin of sales of stores in central Lanzhou in the commercial real estate business. The 1H2018 company's expenses for the period were 13.72%, up 6.43 percentage points from the previous year. Among them, the sales/management/finance expense ratio was 7.87%/3.87%/1.97%, respectively, with a year-on-year change of 3.11/1.73/1.59 percentage points. The large increase in the sales expense ratio was mainly due to the year-on-year increase in expenses, depreciation, and utility costs due to the commissioning of Hall A2 of Dongbai Center. Commercial business has clearly recovered. New commercial real estate projects have brought incremental space. After Hall A\ B of Dongbai Center was reopened during the reporting period, there was a significant increase in commercial business revenue and gross profit. In addition, the revenue side of the company's shopping center business also performed well. Fuzhou/Xiamen shopping center revenue increased 4.26%/8.31% year on year, respectively. As Lanzhou Center and Fu'an Dongbai are put into operation one after another in the future, the company is expected to expand new incremental space. Lowering the profit forecast and maintaining the “increased holdings” rating The company's performance was greatly affected by the commercial real estate industry. We lowered our forecast for the company's fully diluted EPS in 2018-2020 to 0.16/ 0.18/ 0.19 yuan (previously 0.29/ 0.31/ 0.33 yuan), respectively, maintaining the “increase in holdings” rating. Risk warning: The recovery of retail business did not meet expectations, and the operation of the Lanzhou Central Project fell short of expectations.