Core ideas:

In 2020, Kaisa Group achieved contract sales of 106.9 billion yuan, breaking through 100 billion yuan for the first time, a record high. Among them, the Greater Bay area and the Yangtze River Delta region together contribute 75% of the company's sales share. Looking to the future, the company's sales scale is expected to achieve sustained growth for two main reasons. First, the company adheres to the layout of high-energy cities. First-tier cities account for 49% of the new land reserves in 2020, an increase of 8 percentage points compared with the same period in 2019. Second, the company has an abundant value of goods, the existing value of 670.12 billion yuan, an increase of 27.0% over the same period last year, of which the salable value reached 191.2 billion yuan in 2021, the total value of goods can meet the development of the company in the next three years or so.

First, the Greater Bay area and the Yangtze River Delta contribute 75% of the share, and abundant goods value promotes performance growth. Kaisa Group's sales performance can achieve steady growth for two main reasons: first, adhere to the layout of the five core urban agglomerations dominated by the Greater Bay area. Among them, the sales share of the Greater Bay area and the Yangtze River Delta region has reached 75%, and the company's first-line sales share has reached 40%. The market is hot, and the housing demand has remained exuberant for a long time, which is the main driving force to promote the growth of sales scale. Second, the value of the goods is sufficient. The company's existing goods value is 670.12 billion yuan, an increase of 27.0% over the same period last year, of which the salable value reached 191.2 billion yuan in 2021. The high-quality and abundant goods value supports the sales growth.

Second, 2021 carry-over revenue is expected to be about 70 billion, and the profit space is relatively sufficient. We believe that the company's operating income is expected to continue to grow in the future, and in the case of declining industry profit margins, Kaisa carry-over project profit space is still relatively sufficient, bringing core profit growth to the company.

Third, the net debt ratio is reduced by 46bps.2021 the cost of capital is expected to reduce the 1bps2020 year, Kaisa Group's financial leverage has been significantly improved, the net debt ratio has decreased by 46 percentage points compared with 2019, the cash-to-short-debt ratio has increased from 1.1times to 1.6times, unrestricted funds can completely cover short-term interest-bearing liabilities, and the debt-paying ability is strong. In terms of financing, management believes that through the continuous optimization of the debt structure and the continuous expansion of financing channels, it hopes to drop to about 7.7% in 2021.