Core opinion: The decline in profit margins in a single quarter affects performance. In 20Q3, the company's operating income increased by 20.9% year on year, net profit was down 24.9% year on year, and net profit was reduced by 9.9% year on year in Q1-3. It was mainly affected by Q3's performance in a single quarter. In terms of profit margin, Q3's overall gross margin was 25.1%, down 7.7pct year on year. Affected by factors such as declining gross margin, rising taxes and fees, and losses from joint ventures, Q3 companies' net profit margin was 8.3%, down 5.1 pct year on year. Sales have been growing steadily, and land investment has contracted slightly. In terms of sales, Q3's sales amount increased 19.9% year on year, and corresponding area and average price increased by 12.4% and 6.7% respectively. Volume and price all contributed positively, and the growth structure was relatively healthy. Q1-3 The company achieved a cumulative sales scale of 73.7 billion yuan, an increase of 8.7% over the previous year, and a sales target completion rate of 60.9%. The progress has exceeded the average of previous years. In terms of land development, the total amount of land acquired by Q3 companies was 3.83 billion yuan. The corresponding amount of land acquisition intensity (land acquisition/sales) was 15%, and Q1-3 land acquisition strength was 33%, up 7 pct from '19. Interest-bearing debt rose slightly, and the leverage structure improved slightly. As of 20Q3, the company's interest-bearing debt was 71.7 billion yuan, a slight increase of 1.2% from 20H1. Judging from the reference indicators specified in the new financing regulations, as of 20Q3, the company is still stepping on two lines: the balance ratio after deducting advance accounts was 75.3%, up 0.3 pct from 20H1, and 5.3 pct above the red line (70%); the short-term cash debt ratio was 0.93x, lower than the red line (1x), but 0.06x better than 20H1; the net debt ratio was 95.5%. Although it was 1.9 pct higher than 20H1, it was still within a safe range (100%). In terms of leverage structure, the company's overall leverage multiplier as of 20Q3 was 6.4x, up 0.1x from 20H1. The leverage structure improved slightly mainly due to increased operating leverage. The company's EPS for 2020 and '21 is expected to be 2.20 or 2.34 yuan/share. The company's net profit in 20/21 is estimated to be 101/12 billion yuan, corresponding to dynamic PE 3.3x/3.1x, maintaining the company's reasonable value of 13.93 yuan/share, corresponding to 6.3X dynamic PE in '20, and maintaining a “buy” rating. Risk warning. The repayment rate continues to decline, and the company faces certain debt repayment pressure and uncertainty about subsequent expansion; the recovery of industry prosperity falls short of expectations, the deconstruction of new cities is slowing down, and financing costs are rising.