The company achieved revenue of about 392 million yuan and net profit of 90 million yuan in the first half of 2019, an increase of 46.7% and 153.1% over the previous year. The company takes property management and commercial operations as the core of its development. Driven by the strong sales growth of its parent company, China Aoyuan, in recent years, the growth of property management service revenue in the next three years is highly predictable and certain. We expect the company's management area to reach 15 million square meters by the end of 2019, an increase of about 50% over 2018; commercial operating revenue accounted for nearly 30% of total revenue in the first half of 2019, becoming an important stabilizer for the company to maintain profit growth. At the same time, the company actively lays out the big health industry and enhances customer satisfaction through various services such as community traditional Chinese medicine and medical beauty. We raised the company's EPS in 2019 and 2020 to $0.22 and $0.34 respectively, giving the company 30 times PE in 2019, corresponding to the target price of HK$7.24, and maintaining the “buy” investment rating. Performance growth in the first half of 2019 was strong. In the first half of 2019, the company achieved revenue of about 392 million yuan, an increase of 46.7% over the previous year. Property management services and commercial operation services accounted for 73.3% and 26.7% of revenue, respectively. It achieved gross profit of 155 million yuan, a year-on-year increase of 60.4%, and net profit of 0.9 billion yuan, a sharp increase of 153.1% over the previous year. The rapid growth in the company's performance was mainly driven by a steady increase in management area and commercial operation services. The company's gross margin increased 3.4 percentage points to 39.6% from 36.2% in the same period in 2018. The gross margin of both the property management sector and the commercial operations sector increased significantly. The scale of the property management business is steadily expanding. With the steady increase in the size of the company's management area, the company's property management service division achieved revenue of 287 million yuan in the first half of 2019, an increase of 40.9% over the previous year. Among them, revenue from property management services was 179 million yuan, up about 26.46% year on year; sales support service revenue was 78 million yuan, up 94.72% year on year; and community value-added service revenue was 31 million yuan, up 35.67% year on year. The increase in revenue from property management services in the first half of 2019 was mainly due to the increase in the construction area under management from 10.43 million square meters at the end of 2018 to 12 million square meters. The increase in revenue from sales support services mainly benefited from the development of the parent company, Aoyuan China (3883.HK), and the increase in the number of case field deliveries. The company's business is deeply located in South China, and the share of managed properties in South China is about 62.1%. In the future, the company's property management services will continue to benefit from the development of the Greater Bay Area in Guangdong, Hong Kong, and the Olympic Greater Bay Area. The parent company, China Aoyuan (03883.HK), has strong sales. 2020 was the peak period for the company's management area. As of June 30, 2019, 92.3% of the company's management area of 12 million square meters came from parent company China Aoyuan (03883.HK) and its affiliates. The increase in the company's performance is closely related to the development of parent company China Aoyuan. From 2016 to 2018, China Aoyuan's contract sales amount increased from 25.6 billion yuan to 91.28 billion yuan, with a three-year compound growth rate of 89%. Among them, sales in 2018 achieved rapid growth of 100.2%, making it one of the companies with the fastest sales growth rate in 2018 among domestic housing stocks. In 2018, Aoyuan China achieved a rapid increase in contract sales area of 8.863 million square meters, which is expected to be delivered around 2020, so 2020 will be the peak period for Aoyuan Health's parent company to manage space. As of June 30, 2019, the total construction area of the land reserve is about 40.12 million square meters (equity ratio: 81%), which is sufficient to meet the company's development needs in the next three years or so, and the certainty of performance growth is strong. We expect the company's management area to reach about 15 million square meters by the end of 2019, an increase of about 50% over 2018. China Aoyuan's strong sales and abundant land reserves have brought high predictability to the company's future growth in the construction area under management. Commercial operation services have a certain competitive advantage. In terms of commercial operations, the company currently mainly provides market positioning and merchant recruitment services before the opening of the mall, as well as commercial operation and management services after the opening of the shopping mall. In the first half of 2019, the company's commercial operating revenue was 104 million yuan, up 65.3% year on year, accounting for about 26.7% of total revenue. As of June 30, 2019, the company provided commercial operation services to 12 shopping malls in operation. Compared with 3 new shopping malls opened at the end of 2018, the construction area under management is about 530,000 square meters, and it is expected that 10 new shopping malls will be built throughout the year; it has contracted to provide commercial operation and management services for 34 shopping malls, with a contract construction area of about 1.6 million square meters, providing post-opening commercial operation and management services for 25 shopping malls with a total contract area of about 1.2 million square meters. The average contract period for commercial operation and management services is usually as long as 10 to 20 years. It has the characteristics of long term, stable revenue, and high gross margin. It is expected that in the future, with the steady growth of the company's shopping mall operating projects, the share of commercial operating revenue will continue to increase, becoming an important stabilizer for the company to maintain profit growth. Lay out the big health industry and promote diversified business development The company not only takes property management and commercial operation as the core of development, but also lays out the big health industry. Currently, the expansion direction in the big health sector is mainly in the two areas of community traditional Chinese medicine and medical beauty. (1) At present, the company has set up and operated two traditional Chinese medicine centers in managed properties to create “community+traditional Chinese medicine” services to provide residents with more convenient community medical services. (2) The company vigorously promotes the development of medical aesthetic services. Currently, the company has an “MSARORA” brand medical aesthetic clinic in Guangzhou and plans to continue to open new stores in first-tier cities such as Shenzhen and Guangzhou. At the same time, the company's online platform connects to the “Dr. Chunyu” online medical consultation service platform to provide “online+offline” health services and enhance customer satisfaction through diversified value-added services. The investment advice company focuses on both property management and commercial operations. Driven by strong sales growth in recent years by parent company China Aoyuan, the company, has strong predictability and certainty about the growth of property management service revenue over the next three years. We expect the company's management area to reach 15 million square meters by the end of 2019, an increase of about 50% over 2018; commercial operating revenue accounted for nearly 30% of total revenue in the first half of 2019, becoming an important stabilizer for the company to maintain profit growth. At the same time, the company actively lays out the big health industry and enhances customer satisfaction through various services such as community traditional Chinese medicine and medical beauty. We raised the company's EPS in 2019 and 2020 to $0.22 and $0.34, giving the company 30 times PE in 2019, corresponding to the target price of HK$7.24, and maintaining the “buy” investment rating. Risks suggest that adjustments in the real estate industry have exceeded expectations, leading to a slowdown in company performance growth; personnel costs have risen sharply; and business progress in commercial operations and the health industry has fallen short of expectations.