Core views:

1. Sales performance increased 47.0% year on year, and revenue growth is highly certain. In the first half of 2021, Zhengrong Real Estate's contract sales amount was 82.30 billion yuan, reaching a year-on-year growth rate of 47.0%. The sales target was 150 billion yuan, which reached 54.9%; the contract sales area was 4.977 million square meters, an increase of 36.2% over the previous year. At the same time, operating income performance was also excellent, with a year-on-year increase of 10.1% to 16.01 billion, and prepaid accounts of 7991 billion, an increase of 31.3%, locking in future revenue growth of enterprises to a certain extent.

2. Cooperative development responds to environmental changes. The long-term investment ratio is less than 40%. While continuing to cultivate the Yangtze River Delta and Haixi economic zones, investment in the Pearl River Delta has been increased, adding 3,556 million square meters of land reserves, of which 24% is located in the Pearl River Delta. As the market environment changed, the proportion of cooperation increased, and large-scale housing enterprises that are deeply cultivated locally were selected as partners to achieve expansion. The investment ratio has been below 40% since 2019, meeting the new regulations.

3. Debt structure optimization and reduction of financing costs

Optimize the debt structure and strictly control debt growth. Replacing short-term debt with long-term debt, exchanging high-cost debt at low cost, and continuously improving the financial situation led to a further decline in the growth rate of interest-bearing debt to 12.2% and financing costs to 6.4%. It can be expected that the three red lines will be fully met.