1H's revenue and profit declined due to the decline in the floor space. The company achieved operating income of RMB 226.98 billion in the first half of 2019, down 24.4% from the same period last year. Among them, the property development portion of revenue was 221.14 billion yuan, down 25.0% year on year. Mainly due to the handover deadline agreed in the sales contract, the area to be handed over during the reporting period decreased, and the area scheduled for handover during the reporting period decreased by 25.8% year on year. The company realized gross profit was RMB 77.26 billion, down 29.0% from the same period last year; realized net profit was RMB 27.06 billion, down 49.0% year on year; net profit attributable to shareholders was RMB 14.02 billion, down 51.6% year on year; and core business profit was RMB 30.35 billion, down 44.8% year on year. The company achieved a diluted profit of RMB 1.125 per share in 2018, down 48.9% from the same period last year. Continue to maintain huge, high-quality land reserves, and keep the average land price cost low. In the first half of 2019, a total of 79 land reserves were purchased, and additional surrounding land was purchased for 14 existing projects. The new land reserve construction area was 44.49 million square meters, with an average cost of RMB 1,699 yuan/square meter. As of June 30, 2019, the company had a total of 864 land reserve projects distributed in 232 cities in China, with a total planned construction area of 319 million square meters and an original land reserve value of RMB 522.7 billion. Sales of 1H contracts declined slightly, and the average sales price continued to rise. From January to June 2019, the company achieved contract sales of RMB 281.81 billion, down 7.4% year on year. The contract sales area was 26.20 million square meters, down 9.8% year on year; the average contract sales price was RMB 10,756 per square meter, the highest level in history. In the first half of the year, the company launched 81 new projects; the total number of projects on sale that were fully completed and under construction reached 910. In the first half of 2019, the company started a new construction area of 35.11 million square meters, an increase of 11.6% over the previous year. As of June 30, 2019, the company had 772 projects under construction, covering an area of 137 million square meters, up 8.1% and 1.7% respectively from the end of 2018; the completed area was 33.36 million square meters. Investment advice: maintain a “superior to market” rating. We expect the company to achieve net profit attributable to shareholders of the parent company in 2019 and 2020 of 35.489 billion yuan and 39.445 billion yuan respectively, corresponding to EPS of 2.70 yuan and 3.00 yuan respectively. As of September 13, 2019, the company closed at HK$18.00 (RMB 16.27), corresponding to 2019 and 2020 PE of 6.02 times and 5.42 times respectively, and the corresponding PEG value in '19 was 2.23. Considering that the company, as a leading real estate company, has a high dividend return and significant risk reduction in leverage reduction effects, we gave the company 8-9XPE in 2019, with a reasonable value range of RMB 21.62-24.32 (HK$23.86-26.84), maintaining a “superior to the market” rating. Risk warning: Sales of the company's third- and fourth-tier projects fell short of expectations, and settlement fell short of expectations; the industry faces a risk of declining fundamentals. Full text exchange rate: 1 HKD = 0.9062 RMB.