Investment highlights: 1. The event company released its 2019 annual report. During the reporting period, the company achieved operating income of 105.210 billion yuan, up 25.55% year on year; the company achieved net profit attributable to shareholders of listed companies of 14.612 billion yuan, up 24.40% year on year; net profit attributable to shareholders of listed companies after deduction was 14.443 billion yuan, up 36.43% year on year; the company's basic earnings per share was 4.75 yuan, up 25.33% year on year. 2. Our analysis and judgment (1) Steady growth in performance and steady profitability. In 2019, the company achieved operating income of 105.210 billion yuan, an increase of 25.55% over the previous year; net profit of 14.612 billion yuan, an increase of 24.40% over the previous year. Looking at the subregion, the region around Beijing achieved revenue of 57.979 billion yuan, an increase of 0.49% over the previous year, and the region around Beijing achieved revenue of 46.719 billion yuan, an increase of 81.74% over the previous year. The share increased from 30.82 in the same period last year to 44.62%. The company's gross margin was 43.7%, up 2.1 percentage points from the previous year, and the net profit margin was 14.0%, which was basically the same as the previous year. The company achieved remarkable results in reducing fees and increasing efficiency. The management expense ratio fell 1.95 percentage points year on year, and the sales expenses rate fell 0.45 percentage points year on year. As of the end of the reporting period, pre-collected accounts amounted to $125.285 billion, covering 1.2 times the revenue for the same period, providing a strong guarantee for future performance. (2) The offsite replication was very effective. The share of sales outside Beijing increased during the reporting period. The company's real estate business achieved sales of 143.172 billion yuan during the reporting period, of which the settlement revenue of the New Industrial City Business Park was 36.837 billion yuan, the contract sales volume of the park's supporting housing business was 102,935 billion yuan, and sales of other businesses (property and hotels) were 3.4 billion yuan. The company has contracted a sales area of 11.84.19 million square meters. Sales in regions outside of Beijing were 82,809 billion yuan, up 9.51% year on year. The share increased from 46.46% in the same period last year to 57.84%. The share of sales area around Beijing increased from 54.15% in the same period last year to 63.68%. Following the Nanjing and Hangzhou regions, the area around Zhengzhou became a new sales performance growth point for offsite replication. (3) Financial performance was steady. During the reporting period with accelerated sales payback, the company's balance ratio was 83.9%, down 2.7 percentage points from the previous year, and the balance ratio after excluding accounts received in advance was 56.5, up 3.5 percentage points from the previous year. The company's monetary capital is 42,963 billion yuan, and its solvency is fully guaranteed. The company's sales payback continued to grow during the reporting period, and with the unblocking of the Hebei market, it achieved a cash flow of 94.378 billion yuan from operating activities, an increase of 19.89% over the previous year. 3. Investment suggests that the company's new industrial city business has clear core competitiveness, and has achieved remarkable results in offsite replication. After a safe investment, the company's financing environment and structure have been further improved and optimized. We expect the company's earnings per share in 2020 and 2021 to be 5.95 and 7.12 yuan, respectively. Based on the closing price of 22.72 yuan on April 27, the corresponding dynamic price-earnings ratio was 3.8 and 3.2 times, respectively, which is lower than the industry average. It is attractive. We maintain our “recommended” rating. 4. Risk warning: policy regulation risk, risk of a sharp drop in housing prices, etc.