Event: On August 28, 2020, the company released its 2020 semi-annual report: in the first half of the year, it achieved operating income of 37.372 billion, -3.51% year-on-year; realized net profit of 6.062 billion yuan, -28.52% year-on-year. Performance has declined due to the epidemic, and business quality has continued to improve 1) Performance has declined due to the epidemic: The company achieved operating income of 37.372 billion yuan in the first half of the year, down 3.51% from the same period last year, and realized net profit of 6.062 billion yuan, down 28.52% from the same period last year. Mainly affected by the epidemic, the company's real estate project delivery and settlement in major regions around Beijing and other major regions lagged behind, resulting in a 30.24% year-on-year decline in business revenue; 2) Business quality continued to improve: In the first half of the year, the company paid close attention to implementing operating repayments, and the company's repayment rate increased compared to the same period last year Nearly 11 percentage points; at the same time, operating cash flow continued to be optimized. Compared with the same period last year, the company's overall net operating cash flow outflow in the first half of the year decreased by 2 billion yuan; 3) Further optimization of control: During the reporting period, the company's fee reduction and efficiency were remarkable. The management expense ratio was 6.9%, down 0.4 percentage points from the same period last year, and the sales expense ratio was 1.6%, down 0.6 percentage points from the same period last year. The new industrial city business grew rapidly, and the share of offsite contributions increased further 1) Strong business performance: In the first half of the year, the company's new industrial city business achieved park settlement revenue of 19.844 billion yuan, an increase of 45.68% over the previous year, of which industrial service revenue was 13.209 billion yuan, an increase of 11.24% over the previous year, and additional industrial service revenue from regions outside Beijing was 10.238 billion yuan, an increase of 16.69% over the previous year; 2) The share of offsite contributions increased further: Although the company's overall sales declined by a certain margin due to the impact of the epidemic, sales in regions outside of Beijing The proportion of the company's overall sales increased further to 64.98% from 58.21% in the previous year, and the effects of offsite replication continued to be evident. Land acquisition efforts increased rapidly, and commercial real estate business expanded rapidly 1) Active land acquisition in the first half of the year: The company strengthened land investment in the first half of the year. The transaction amount of newly acquired land use rights was 24.152 billion yuan, and the actual land payment amount was 13.4 billion yuan. As of the end of the reporting period, the planned land reserve construction area was 12.7394 million square meters, an increase of 2.159,800 square meters over the beginning of the year; 2) The commercial real estate development was remarkable: During the reporting period, the company obtained a total of 4 new commercial complex projects, won the bid for 1 project agency service, and locked in the early stages of 1 urban renewal project Service providers, covering key domestic cities such as Nanjing, Wuhan, Guangzhou, Harbin, Dongguan, and Shenzhen, have basically completed the layout in target cities. Investment suggestions: In the first half of the year, the revenue and performance of companies affected by the epidemic declined, but cash returns from sales improved, and the non-Beijing region's contribution to the new industrial city business expanded further, verifying the logic of successful offsite replication and expansion of the company's park model; at the same time, the strategic layout of the commercial real estate business in the core metropolitan area was basically completed. The company's 2020-2022 EPS is expected to be 6.29, 7.87, and 9.38 yuan, corresponding to the current stock price PE of 2.72, 2.17, and 1.82x, maintaining the “buy” rating. Risk warning: The implementation progress of the new industrial city contract project fell short of expectations, and the company's sales repayment fell short of expectations.