1. Overview of events Xinhualian disclosed the 2018 semi-annual report. During the reporting period, the company achieved operating income of 2,966 billion yuan, an increase of 33.61% over the same period last year; realized net profit attributable to shareholders of listed companies after deducting non-recurring profits and losses of 129 million yuan, an increase of 138.86% over the same period last year. 2. Analysis and judgment The real estate business progressed steadily. Gross margin increased. During the reporting period, the company achieved a contracted sales area of 413,600 square meters, an increase of 13.22% over the previous year, a sales amount of 4.739 billion yuan, an increase of 21.70% over the previous year, and the residential business progressed steadily. In addition to the traditional housing business, the company uses comprehensive business formats and supporting measures such as commerce, hotels, children's parks, and complexes to create a real estate business ecosystem to meet the all-round needs of buyers. The gross margin of the company's real estate business reached 42.55% during the reporting period, an increase of 11.08 percentage points over the previous year. Cultural tourism projects continue to be implemented, and the strategic layout continues to increase. Xinhualian has always used the cultural tourism industry as an important pillar to promote the company's strategic transformation. A national tourism priority project and a key project in Hunan Province - the Changsha Xinhualian Tongguanyao Scenic Area officially opened and operated on August 28, 2018. Following the full opening of streets on the east coast of Jiuzi Ancient Town, Wuhu, the company's first cultural tourism project, the Ocean Show officially opened during the reporting period, and the west bank of Jiuzi Ancient Town was fully completed. The company's various cultural tourism projects are actively expanding into education, sports, culture, exhibition and other industries, and continue to explore new paths to achieve diversified links between the company's commercial real estate and cultural tourism real estate sectors. Promote fintech investment and form collaboration between finance and main businesses. As of the end of the reporting period, the company held 289.4 million shares of Bank of Changsha shares through wholly-owned subsidiaries, accounting for 9.40% of its total share capital before issuance, making it the second largest shareholder. On August 1, 2018, New Silk Road Cultural Tourism, a subsidiary of the company, successfully acquired 100% of the economic interests of Shenzhen Youwo Financial Information Service Co., Ltd. by issuing shares to purchase assets, expanding the company's presence in the field of fintech. Furthermore, the company's participation in the preparation of Asia Pacific Reinsurance will accelerate the pace of strategic transformation of the company's business. 3. Profit forecasting and investment suggest that Xinhualian's real estate business develop steadily, while comprehensively promoting the strategic transformation of “cultural tourism+real estate+finance”. In the future, the company's diverse businesses can be expected to develop collaboratively. The company's maximum, minimum, and median PE in the past three years were 67.9, 12.0, and 40.0, respectively. Currently, the overall PE of the real estate sector is 11.0. It is predicted that Xinhualian's 2018-2020 EPS will be 0.59 yuan, 0.73 yuan, and 0.87 yuan respectively, and the corresponding PE will be 9.2, 7.4, and 6.2 respectively, giving it a “recommended” rating. 4. Risk warning: The real estate industry's regulatory policies have been tightened, and the transformation progress has fallen short of expectations.