Core views:

In the first half of 2020, on the basis of previous deep cultivation in the Yangtze River Delta and Haixi, the company once again increased investment in these two core regions, accounting for 78% of additional land storage.

In addition to this, the company attaches importance to increasing the share of equity. A higher share of equity not only brings an increase in equity sales to the company, but is also conducive to quantitative and qualitative development in order to increase revenue and profit.

1. Carry-over revenue grew steadily, with a rich heritage in the Yangtze River Delta and Haixi. In the first half of 2020, the company's revenue reached 14.54 billion yuan, an increase of 6.5% over the previous year; profit margins remained stable, with gross profit margin of 20.3% and net profit margin of 8.8%. The company achieved sales volume of 55.93 billion yuan, sales area of 3.655 million square meters, and sales prices remained stable. Judging from the sales distribution, the Yangtze River Delta and Haixi are the company's key sales regions, with cumulative sales reaching 39.53 billion yuan, accounting for 70.5% of total sales.

2. Deeply cultivate the Yangtze River Delta and Haixi, and focus on increasing the share of equity

In the first half of 2020, the company added 19 projects in 12 cities, added 3,023 million square meters of land reserves, and invested 17.78 billion yuan. In terms of investment distribution, the company adheres to the “deep regional cultivation” strategy, accounting for 52% and 26% of investment in the Yangtze River Delta and Haixi, respectively. Zhengrong gradually increased its share of equity in the project. Its share of total land reserve equity increased from 55% in 2019 to 58% in the first half of 2020, and its share of new land reserve equity increased to 73%. A higher share of equity not only brought an increase in equity sales to the company

3. Debt repayment pressure is falling again, and financing costs are declining

While continuously adjusting the debt maturity structure and emphasizing repayment and cash flow management, the company's net debt ratio once again fell to 71.4%; the short-term cash debt ratio rose from 1.8 times at the end of 2019 to 2.1 times, and both long-term and short-term debt repayment pressure declined again. At the same time, the company's domestic and foreign financing costs also declined. The comprehensive average financing cost was 7.0%, a decrease of 0.5 percentage points. Zhengrong Credit Ratings is highly recognized by the capital market. Among them, China Chengxin and Dagong both gave the company AAA ratings, while Moody's, Fitch, and S&P maintained the company's B1, B+, and B ratings respectively.