Profit and revenue were both growing year on year. On the evening of August 24, the company released its 2020 semi-annual report. Despite being affected by the pandemic, the company achieved positive profit growth. In the first half of the year, the company's net profit increased 1.95% year-on-year, significantly ahead of commercial bank profit growth during the same period. Revenue and pre-provision profit were strong. Revenue and pre-provision profit for the first half of the year increased 2.53% and 4.11%, respectively. The net interest spread fell slightly, and the debt-side cost ratio fell. The company's net interest spread for the first half of the year was 2.01%, down 5 bps and 11 bps from the first quarter and the full year of last year, respectively, mainly affected by the decline in asset pricing. According to estimates, the yield on interest-bearing assets in the first half of the year fell by 40 bps to 3.88% compared to the full year of last year. Faced with pressure, the company is speeding up the adjustment of the balance and liability structure to increase the proportion of loans with higher returns. Also, seizing the opportunity of declining interbank interest rates this year, the company has drastically reduced the cost of debt. The cost ratio of the company's interest-bearing debt in the first half of the year fell by 32 bps to 1.98% compared to the full year of last year. It is close to the pricing level of major banks, and the cost advantage is prominent. Asset quality is stable, and the attention rate is record low. The company's non-performing rate at the end of half a year was 1.68%, which remained flat from quarter to quarter, maintaining the level of non-performing rate before the pandemic. The comparative advantage of asset quality is very clear. After centralized confirmation and disposal of non-performing loans was carried out in the first quarter, the company's disposal pressure was greatly reduced in the second quarter, creating room for profit release. The focus loan index hit a new low since listing, at 1.34%, a sharp drop of 26 bps over the previous month, and the asset quality was consolidated. Risk resilience was taken to the next level. The provision coverage ratio and loan ratio were 245% and 4.12% respectively, up 5 pct and 8 bps from the previous month, the highest record since listing. Convertible bonds were implemented to supplement capital in a timely manner. At the end of half a year, the company's assets increased by 3.41% year on year, but the loan growth rate was as high as 15.60% year on year. Since its listing last year, the company has accelerated the transformation of its asset and liability structure, increased its share of cost-effective deposit and loan business, and strengthened its ability to serve the real economy. The slow asset growth rate is expected to improve after capital is replenished. The company's core tier 1 capital adequacy ratio at the end of half a year was 10.81%. Although short-term capital is tight, the company is promoting capital replenishment work in due course. In July of this year, 4.5 billion yuan of convertible bonds were landed, and capital “ammunition” has been promptly replenished. Investment advice: Optimistic about the company's long-term development space, the company's fundamentals are stable. After capital is replenished, it is expected that the company's business transformation will accelerate, and future development can be expected. We are optimistic about the company's long-term development space. It is predicted that the net profit growth rates of Guimu in 2020-2022 will be 3.08%, 6.20%, and 8.03%, respectively. The 2020 BVPS was 4.05 yuan, corresponding to 1.07 times PB. Maintain a “Recommended” rating. Risk warning: Asset quality fluctuates, interest rate centers decline, and economic recovery falls short of expectations.