Event Overview Rongsheng Development released its 2020 three-quarter report. The company achieved revenue of 43.66 billion yuan in the first three quarters, +12.4% year-on-year, and net profit of 4.4 billion yuan, and net profit of 4.40 billion yuan, -9.9% year-on-year. Performance was under pressure in the short term. Profit levels declined slightly from 2020Q1-3. The company achieved operating income of 43.66 billion yuan, +12.4% year-on-year, net profit of 4.40 billion yuan, -9.9% year-on-year. The net profit growth rate was mainly lower than the revenue growth rate: (1) the company's gross margin fell 2.51pct year on year; (2) during the reporting period, the company achieved net investment income of -225 million yuan, compared to 181 million yuan in the same period last year. Furthermore, the company's return on net assets and net interest rate were 10.27% and 9.93% respectively, down 3.05pct and 2.51pct from the same period last year, and the company's profit level declined. Sales scale growth is accelerating, and land acquisition attitudes tend to be positive 2020Q1-3. The company achieved sales volume of 73.71 billion yuan, an increase of 8.7% over the previous year. Facing the epidemic, the company's sales resumed positive growth in the second quarter. The growth rate increased further in the third quarter, and the sales situation improved. In terms of land acquisition, the company added 5.74 million square meters of planned land acquisition, corresponding land acquisition amount of 24.65 billion yuan. Land acquisition amount accounted for 33.4% of current sales amount, up 7.3 pct from 2019, and the land acquisition attitude tends to be positive. The financial situation continued to be optimized, and financing costs gradually declined. As of the end of the reporting period, the company's net debt ratio was 88.15%, down 10.42 pct from last year, and the company's financial situation continued to be optimized. In terms of financing, the company issued 1 billion yuan and 1,120 billion yuan of 3-year general medium-term notes in the third quarter, with coupon interest rates of 7.22% and 7.18%, respectively. Meanwhile, in January and March of last year, the company issued two 270 day ultra-short-term financing notes with interest rates of 7.30%. As the company's financial situation continues to be optimized, the company's financing costs are gradually declining. The investment suggests that Rongsheng's development performance is growing steadily, sales remain resilient, and financial conditions improve. We maintain our previous forecast unchanged. We expect the company's EPS for 20-22 to be 2.53/3.03/3.64 yuan, and the corresponding PE is 2.8/2.4/2.0 times, maintaining the company's “increased holdings” rating. Risks suggest that sales fell short of expectations, profit margins declined, and preparations for inventory impairment affected performance.