20H1 performance +6%, core performance +21%, gross margin decreased slightly, and investment income decreased. 20H1 achieved operating income of 28.24 billion yuan, +19.3%; net profit of 2.84 billion yuan, +1.4%, net profit of 2.42 billion yuan, +6.3%; net profit of 2.42 billion yuan, +6.3%; net profit of 2.45 billion yuan, +21.0%; basic earnings per share of 0.9 yuan, +5.7%; gross margin and net profit margin were 29.3% and 8.6% year on year, respectively -0.5pct and- 1.0pct; the three expenses ratio was 9.0%, y-0.3 pct; minority shareholders' equity accounted for 14.9%, y-3.9 pct; the higher revenue growth rate than the performance growth rate was mainly due to a decline in carry-over gross margin and a decrease of 170 million dollars in investment income compared to the same period last year. 20H1 sales volume of 50.9 billion yuan, year-on-year promotion of 220 billion yuan, year-on-year promotion plan is likely to complete the 20H1 corporate contract sales amount of 50.87 billion yuan (79% of equity), -5.1% year-on-year. Sales recovered rapidly under the influence of the epidemic and achieved 38.5% of the annual sales target of 132 billion yuan; sales payback rate of 90%, +15 pct over the same period last year; sales area: 5.11 million square meters, -3.9%; average sales price: 9,953 yuan/square meter, -1.3%; in terms of promotion, the company in 2020 The plan is to sell 220 billion yuan, of which South China, Midwest, East China, Bohai Rim, and overseas account for 35%, 29%, 21%, 11%, and 4% respectively. Sales in various regions are relatively balanced. According to conservative estimates of elimination of 60%, there is a high probability that the annual sales target will be achieved. 20H1 land acquisition/sales area ratio is 136%. Active land acquisition, abundant soil storage, low prices, and balanced distribution 20H1 companies added 6.95 million square meters of construction, -4.3% year-on-year, and land acquisition accounted for 136% of the sales area; corresponding to an increase in value of 83.2 billion yuan, -4.0% over the same period last year, the increased value accounted for 164% of sales. In addition, the company acquired 29.3% of Jinghan's shares to further expand resources; as of the end of 20H1, the company's total land storage area was 48.74 million square meters, +21.5% year-on-year, of which South China, Midwest, East China, Bohai Rim, and overseas accounted for 38%, 25%, 20%, 12%, and 5% respectively; equity accounted for 78%, year-on-year - 3pct; total land storage price of 2,727 yuan/square meter, +17.5%, land price ratio was only 27%; corresponding total value of 5,015 +17.9%, year-on-year, year-on-year, which can cover sales of 4.2 in '19 Double, and after incorporating urban renewal projects, the value of goods can reach 1.2 trillion yuan, which can help stabilize the profit margin and expand the scale of subsequent sales. Financing costs are stable, financial indicators are healthy, and abundant pre-sale accounts help stable performance release the company balance ratio at the end of 20H1, balance ratio after excluding advance payments, and net debt ratio were 85.9%, 59.5%, and 79.8%, respectively, year-on-year -1.3 pct, +2.0pct, +15.6 pct; the average financing cost of 20H1 was 7.5%, the same as in 2019; the long-term and short-term debt ratio and cash short-term debt ratio were 1.2 times and 1.5 times, slightly lower than 1.3 times and 1.6 times at the end of 19; 20H1 end of the year The amount of 78.73 billion yuan, compared to -8.5% at the end of '19, can cover 1.6 times the real estate revenue in '19, helping the company unleash its performance. Investment suggestions: Steady increase in performance, restoration of sales, active land acquisition, and maintenance of “push-push” ratings. After 25 years of development, China Aoyuan has achieved a leap from a regional housing enterprise in the Pearl River Delta to a nationalized layout of housing enterprises. The company has outstanding diversified land acquisition capabilities, excellent soil storage quality and low cost, leading the industry in sales growth in recent years, driving continued high growth in subsequent performance. We maintained our forecast of the company's earnings per share for 2020-22 of $2.34, $2.81 and $3.31, respectively, and maintained the target price of HK$13.0, equivalent to 45% of the NAV discount and 5.1 times 20PE, maintaining the “push” rating. Risk warning: Business development falls short of expectations, and rising labor costs cause declining profit margins