Key investment events: On October 26, the company released its third quarter report. In the first three quarters, the company achieved cumulative operating income of 320.9 billion yuan, an increase of 9% over the previous year; and realized net profit attributable to shareholders of listed companies of 12 billion yuan, an increase of 1.9% over the previous year. Comment: Profit increased rapidly in the third quarter. In the third quarter of 2020, the company achieved operating income of 111.1 billion yuan, an increase of 20% over the previous year, and net profit of 4 billion yuan, an increase of 42% over the previous year. In the first three quarters, the company achieved cumulative operating income of 320.9 billion yuan, a year-on-year increase of 9%; net profit of 12 billion yuan, a year-on-year increase of 1.9%; and basic earnings per share of 0.99 yuan. The weighted average ROE was 15.36%, down 0.66 percentage points from the first three quarters of 2019. Sales rebounded rapidly in the third quarter, and the repayment rate was as high as 91%. In the third quarter of 2020, the company vigorously promoted the new supply and listing of marketable projects, paid close attention to the removal of sales of stock projects, and achieved good sales performance. In the third quarter, the contract sales amount was 84.9 billion yuan, an increase of 27% over the previous year; the contract sales area was 7.29 million square meters, an increase of 16% over the previous year. The first three quarters achieved a total contract sales amount of 217.9 billion yuan, with a contract sales area of 17.6 million square meters. The company's repayment rate is high. It achieved a repayment rate of 19.4 billion yuan in the first three quarters, with an overall repayment rate of 91%, of which the repayment rate for the residential portion reached 96%. The company's land acquisition efforts are steady, improving the first and second tier layout, optimizing the investment structure, and improving the quality of investment. From January to September 2020, the total amount of land acquired was 81.3 billion yuan. The land acquisition amount accounted for 37% of the sales amount, up from the same period last year. The average floor price for land acquisition was 3,368 yuan/square meter, accounting for 27.2% of the average sales price. Looking at the layout, the proportion of Tier 1 and 2 core city projects has increased. Tier 1 and 2 land acquisition amounts in the first three quarters of 2020 accounted for 76%, an increase of 19 percentage points over 2019. The company's debt level is relatively high, but financing costs remain low. As of the end of the third quarter of 2020, the company's net debt ratio was 187%, up 30 percentage points from the end of last year; the balance ratio was 88.6%, and the balance ratio after excluding accounts received in advance was 82.4%, which was basically the same as at the beginning of the year; and the short-term cash debt ratio was 0.78. The interest-bearing debt balance was $328.2 billion, and the overall average financing cost was 5.59%, which continued to remain low. Other businesses are growing at an accelerated pace. The major infrastructure industry developed rapidly, achieving revenue of 147.2 billion yuan in the first three quarters, an increase of 6% over the previous year; new contracts of 399.1 billion yuan were signed, an increase of 46% over the previous year. Other integrated industries, such as finance, commerce, hotel tourism, health science and innovation, etc., are focusing on promoting innovation, transformation and development, and the synergy effect has been further enhanced. Investment advice: The company's performance is growing steadily and profitability is improving. Better grasp market trends and structural characteristics, and optimize investment layout. We expect the EPS for 2020 and 2021 to be 1.43 yuan and 1.74 yuan respectively, and the corresponding PE will be 4.3 times and 3.6 times respectively (based on the closing price on October 26, 2020), maintaining a prudent increase in holdings ratings. Risk Warning: Drastic Tightening of Residents' Leverage on Consumer Loans, Mortgages, etc.