Multiple factors affected the decline in core net profit. In the first half of 2022, the company achieved operating income of 29.7 billion yuan, -18.3%; achieved core net profit of 1,820 billion yuan, or -45.6%; during the reporting period, the company's gross profit margin was 20.7%, which remained stable year on year, and the core net interest rate was 6.1%, down 3.1 pct year on year; in addition, the decline in the company's net profit was mainly due to factors such as a sharp decrease in investment income from joint venture projects, loss of property sales, and exchange losses; the company's contract debt at the end of the reporting period was 82.9 billion yuan, an increase of 5.1 billion yuan over the end of 2021. Remarkable results have been achieved, and land acquisition is prudent to guarantee cash flow. The cumulative contract sales amount during the reporting period was about 63.1 billion yuan. Affected by the decline in overall industry sentiment and the epidemic, sales fell 53.6%, ranking 15th in the country. The company's contract sales volume in Tier 1 and 2 cities accounted for about 86.4%; the contract sales area in the first half of the year was about 4.14 million square meters, up from -48.0% in the same period of the previous year, and the average sales price was 15,200 yuan/ping, down 11% from 17,100 yuan/ping in the same period in 2021; the company achieved remarkable payback results, reaching 76 billion yuan per square meter, and recorded about 100% contract sales contract payment Rate: In the first half of the year, the company added 6 new projects, located in cities such as Beijing, Shanghai, Ningbo, Changsha, Qingdao, and Yiwu. The total equity land amount was about 3.4 billion yuan, -87% compared with the same period, and 374,000 square meters of supplementary equity land storage area, -92% over the same period. Land acquisition was prudent. The average land acquisition cost was 10,662 yuan/square meter, a slight increase over the same period. Diversified businesses go hand in hand. During the reporting period, Xuhui Yongsheng Service achieved revenue of 3.16 billion yuan, +53.6% year over year, with a total contract area of 291 million square meters, of which the total construction area under management was 208 million square meters, +60%; Xuhui Lingyu has laid out 21 cities across the country and is operating and owning more than 30 large community projects; the company's commercial operation sector has more than 30 complexes, of which 14 have already been opened, with an overall occupancy rate of 92%; Xuhui Construction Management has a total of 35 projects under management, mainly distributed in Tier 1 and 2 key cities, with a cumulative total of over total management. 700 Manpei. The financial situation is relatively secure, and financing costs have declined. At the end of the reporting period, the company's total interest-bearing debt was $114.1 billion, of which short-term debt accounted for 17%, the balance ratio after pre-payment was 67.7%, the net debt ratio was 78.5%, and the short-term cash ratio was 1.62 times; in January of this year, the company issued US$150 million green senior notes, and HK$2,545 billion convertible bonds in March and June of this year (China Securities Financial Corporation and Guotai Junan Securities created credit protection certificates for them); the company had no rigid payment of open market bonds before the end of the year vouchers, Short-term debt pressure; the company's weighted average debt cost during the reporting period was 4.9%, down 0.1 pct from the full year of last year. Investment advice: As an exemplary real estate enterprise recognized by the supervisory authorities, the company's operations are expected to gradually return to normal as industry sales improve. Affected by the industry environment, we adjusted the company's profit estimates and target price. We expect the company's EPS for 2022 to be 0.64/0.63/0.51, respectively, giving a target price of HK$3.18, which corresponds to 5.5 times the projected profit for 2024. Risk warning: Performance forecasts and valuation judgments fall short of expectations; the domestic COVID-19 pandemic is repeated.