Incident, Jindi Commercial Investment announced operating data for June 2018: in June, it achieved contract sales of about 2,812 billion yuan, contract sales area of 152,200 square meters, average sales price of 18,700 yuan/square meter; from January to June 2018, the company achieved cumulative contract sales of 15.967 billion yuan and a sales area of 736,500 square meters. The review was influenced by the pace of promotion. The sales scale declined in June, and the cumulative average sales price remained high. The company's contract sales in June were about 2,812 billion yuan, down 56% year on year; contract sales area was 152,200 square meters, down 58% year on year; the reason for the sharp decline in the company's monthly sales scale was due to the postponement of pre-sales of some real estate properties and changes in the pace of promotion. Judging from the cumulative data, from January to June 2018, the cumulative contract sales volume was 15.967 billion yuan, a year-on-year decrease of 29%; the cumulative contract sales area was 736,500 square meters, a year-on-year decrease of 38%. There was little saleable value in the first half of 2018, compounded by delays in pre-sales of some properties, which led to a decline in the company's sales scale. The total saleable value is expected to increase in the second half of the year, and sales improvements can be expected. The company's average sales price continued to be high. The cumulative average sales price from January to June 2018 reached 21,680 yuan/square meter, an increase of 17% over the previous year. Land acquisition is more active, land reserves are abundant, and costs continue to be low. The company continues to focus on first-tier and second-tier popular cities. In 2017, 25 new projects were added in Beijing, Kunming, Kunshan, Jinan, Nanjing, etc., with a cumulative planned construction area of 4,061 million square meters, of which projects located in Beijing and Shanghai accounted for 14%; equity construction area was 1,878 million square meters; total land acquisition amount was 30.993 billion yuan, and the average purchase cost was 6,600 yuan/square meter, which was 36% of the average sales price at the end of 2017. In 2017, the company's land reserve construction area reached 13.71 million square meters, an increase of 104.29% over the previous year; among them, first-tier cities accounted for 21%, second-tier cities such as Changsha, Hangzhou, Kunming, Kunshan, Nanjing, Qingdao, Tianjin, and Wuhan accounted for 71%, and third-tier cities such as Huai'an, Taicang, and Taiyuan accounted for 8%. The owned property is located in a central location, and the rent is considerable. The investment properties owned by the company are located in the core area of the core city, and the high rental rate increases the company's rent scale. At the end of 2017, the occupancy rate of Shenzhen Weixin Software Technology Park Phase 1 and 2, Beijing Sohu Network Building, and Shanghai Bridge 8 projects all reached 100%. Currently, the commercial projects being developed are mainly located in five new business districts in cities such as Suzhou, Nanjing, and Shanghai. It is estimated that the rental income of the commercial real estate sector will exceed 1 billion yuan after completion. Investment suggestion: Jindi commercial land acquisition outlook, focusing on core Tier 1 and 2 cities. Land reserves are abundant and costs are low. Currently, the land reserve scale is close to 14 million square meters. The company's sales growth is expected to accelerate due to the promotion structure. At the same time, the company also holds a large number of high-quality properties in core cities, and also has a large number of properties under construction. Rental income will continue to rise in the future. We expect the company's EPS in 2018-2020 to be 0.19, 0.25, and 0.32 yuan respectively, and the corresponding PE is 3.5, 2.7, and 2.1 times, respectively. Risk warning: The sales scale of the industry has declined sharply; mortgage interest rates have risen sharply; real estate policies have been drastically tightened; capital costs for housing enterprises have risen sharply; and Hong Kong stocks are highly volatile.