Event Overview Rongsheng Development released the August sales report. In August 2020, the company achieved a sales amount of 10.24 billion yuan and a sales area of 928,000 square meters. Sales continued to grow at a high level. Continuing the boom, the company achieved a contract amount of 10.24 billion yuan in August, up 31.3% year on year, up 32.2% year on month; contract area of 928,000 square meters, up 19.9% year on year, up 32.8% month on month; average contract price of 1,033 yuan/square meter, up 9.4% year on month, down 0.4% month on month. Since March, the company's sales have continued to be positive year-on-year. In August, the company once again achieved a high growth rate of over 30%, and sales continued to be booming. Investments tend to be cautious. In August, the company acquired 2 lots of land in Lu'an City and Changsha City, adding 249,000 square meters of planned construction area, a year-on-year decrease of 80.3%, a year-on-year decrease of 66.1%; the total land acquisition price was 240 million yuan, a year-on-year decrease of 90.0%, a decrease of 86.2%; the total land acquisition price accounted for 2.4% of the current month's sales amount, down 28.8 pct from the same period last year, down 20.5 pct from the same period last month, and investment tended to be cautious. Judging from the energy level distribution, the first-tier, second-tier, and third-tier and fourth-tier areas accounted for 0%, 59%, and 41% of the company's new soil storage, respectively; in terms of regional distribution, the proportion of the company's new soil storage in the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei, and central western regions was 41%, 0%, and 59%, respectively. The company is focusing on strengthening the development of the Yangtze River Delta and the Midwest. The investment suggests that Rongsheng's development performance is growing steadily, sales remain resilient, finance continues to improve, and its valuation is at the lowest level in the industry. We maintain the previous profit forecast unchanged. We expect EPS in 20-22 to be 2.53/3.03/3.64 yuan, respectively, and the corresponding PE is 3.2/2.7/2.2 times, maintaining the company's “increase in holdings” rating. Risks suggest that sales fell short of expectations, profit margins declined, and preparations for inventory impairment affected performance.