Incident The company released its 2020 three-quarter report. During the period, it achieved operating income of 43.66 billion yuan, a year-on-year increase of 12.4%, and realized net profit of 4.41 billion yuan to mother, a year-on-year decrease of 9.9%, and EPS of 1.01 yuan/share. A brief review of the increase in revenue and profit in the first three quarters was mainly dragged down by a decline in gross margin. The increase in the company's revenue during the period was mainly due to an increase in the carry-over scale, but the main reasons for the decline in net profit growth rate due to the decline in profitability, with comprehensive gross margin falling 2.5% to 28.8% compared to the same period last year; 2. Cost control capacity declined, and sales management expenses increased by 0.2% to 4.8% compared to last year; 3. There were few assets disposed of during the period, and investment income slipped from 180 million yuan in the same period last year to -0.3 billion in the current period. Sales volume and price have risen sharply, and the target completion rate is relatively good. The company plans to sign a contract amount of 121 billion yuan for the full year of 2020. The first three quarters achieved sales of 73.71 billion yuan, an increase of 8.7% over the previous year. The actual completion rate for the first three quarters reached 60.9%, a slight increase of 0.4% over the same period last year. The sales area was 6.714 million square meters, up 6.0% year on year. The average sales price was 10,978.5 yuan/square meter, up 2.6% from the same period last year. Considering the impact of the epidemic during the year, the company's sales completion this year is in line with expectations. We expect that as the company's promotion strength increases in the fourth quarter and the recovery in industry sentiment, it is likely that the sales target will be achieved throughout the year. Investment intensity has declined, and debt levels have declined. In the first three quarters of 2020, the company added 4.87 million square meters of planned construction area, a year-on-year decrease of 41.7%. The total amount of land acquired was about 21.29 billion yuan, a year-on-year decrease of 23.2%%, and the intensity of land acquisition investment fell to 28.9% from 40.9% in the same period last year. At the same time, due to reduced land expansion efforts, the company's net debt ratio decreased by 10.6% to 85.9% compared to the same period last year. In terms of financing, the company fully grasped the liquidity easing window at the beginning of the year and actively expanded new financing channels. In 2020, the company plans to raise an additional 52 billion yuan, and completed a total of 35.1 billion yuan in the first three quarters. Of these, it successfully registered 710 million yuan of ABS, the head of the Securities Regulatory Commission, and issued 1.41 billion yuan of ultra-short loans and a total of 2.12 billion yuan of medium-term notes. The overall cost of direct financing for the company's bond issuance in the first three quarters was between 6.7% and 7.2%, down from last year. Lower the profit forecast and target price, and maintain the buying rating. We slightly reduced the company's 2020-2022 EPS to 2.39/2.68/3.00 yuan (previously 2.53/3.04/3.66 yuan). Since the average PE valuation of comparable companies in 2020 was 5X, we gave the company a valuation level of 5X in 2020, corresponding to a target price of 11.95 yuan (originally 12.65 yuan). Risk warning: 1. Industry regulation exceeds expectations; 3. The company's diversified industrial expansion falls short of expectations.