Interim results announcement. This is the Shenzhen Venue, and I'm Annie. Welcome to this result presentation. Because of the COVID-19 impact, it's a pity we cannot meet you face-to-face, but we're having this result presentation through the webcast and phone teleconference. Before we start, let me introduce the management to you. First of all, Mr. Li Xin, President of the company, Mr. Zhang Dawei, Vice Chairman and CEO, Mr. Xie Ji, Chief Strategy Officer, and the Chief Human Resource Officer, Mr. Wu Bingqi, Mr. Guo Shiqing, CFO, and Mr. Yu Linkang, the President of Mixc Lifestyle. You might have noticed that we have a very strong management team here with us today. This fully shows the importance that the management has attached to this result presentation, hoping that they can have thorough communications with all the investors. There'll be two parts in the presentation. The management will walk you through the business performance, and then there will be a Q&A session. Before we start, I would like to invite Mr. Li to say some words. Mr. Li, please. Okay. Dear investors and analysts, good afternoon. Thank you very much for joining us for this interim results announcement. In the first half of 2021, we stick to the strategy of not speculating for the apartments. At the market end, at the land end, the government issued a series of controlling measures. With all these measures, this represent a higher requirements for all the developers. In such a context, we stick to our strategic positioning of ourselves and have gone through with our three-plus-one strategies. We also carried out fund management and by applying technologies to empower ourselves in the innovation as well as the financial innovations and so forth. We focus on high quality for growth of our business. In the first half, we delivered very good results, realizing our overall business revenue of CNY 73.7 billion, and the net profit attributable to shareholders also rose by 15.4% to CNY 13.1 billion. We have three core business tracks and in all these business tracks, we realized high quality of growth for each of them. In the first half, if you look at our performance, the development business realized the contract sales of over CNY 170 billion. We also realized the 69% of our growth. For the fixed assets part, we realized the quality of the property management. The rental increased by 63%, reaching CNY 8.3 billion. By reducing cost and improving our efficiency, gross margin rose by 70%, which is much better than expected. Our retailing revenue also increased a great lot. The gross margin rose to 79.6%. Light assets management business sector also realized the growth. We realized the revenue in our Mixc Lifestyle and with 138% of growth. While delivering strong growth in all the business, we also expanded our municipal space operations service sector and further enhancing our strategic positioning of the Mixc Lifestyle. I hope that in the 14th Five-Year Plan, that Mixc Lifestyle will definitely be a strong driving force for our business growth. As for other businesses, we also realized the growth, particularly the long-term leasing, the municipal space operations and so forth. At the same time, we also expanded our business tracks, setting up the industrial parks to operate our new businesses. We have also gone into smart manufacturing, smart city life sciences, and so forth. We also acquired 550,000 sq m for these purposes. We also signed new contracts for these areas. We also carried out fund management and realized the progress and achieved great progress. We conducted fund investment while enhancing ourselves. We also replenished our land bank. Meanwhile, we also stick to our principle of investment with the reasonable returns. We focus on the high energy Tier 2 cities. We acquired 63 and 33 new projects. Through diversified sources of land acquisition, we have high quality of land reserves in our land bank. The evaluation is about CNY 1 trillion of all our land. This will enable a very good foundation for our continuous growth in the upcoming years. We carried out fund management while we improve ourselves and quality as well as the cost reduction and efficiency improvement. We also delivered very good results. We overcome all the difficulties and worked very hard. Meanwhile, we are also aware that there will be short-term fluctuations ahead of us in the near future. The competition is also fierce in the market, which represent a high pressure for us. Looking to the second half, we stick to our investment strategy, we stick to the prudent financial policies so that we can carry out fund operations and capture the opportunities in the market. The management has full confidence that we can deliver the annual result with high quality. I would like to stop here and now our CFO, Mr. Guo Shiqing, will share with you more details about our business performance in the first half of this year. Thank you. Dear analysts, dear investors, good afternoon. I would like to take this opportunity to share with you more details of our business performance in the first half. In the first half, we kept executing the high-quality, sustainable development strategy, the performance is better than expected. The revenue increased by 63.8%, reaching CNY 73.7 billion. The rent increased by 63.4%, reaching CNY 8.3 billion. Net profit attributable to shareholders rose to CNY 13.1 billion, up by 15.4%. The core net profit also grow to CNY 9.9 billion by 18.3%. The dividend for the interim period rose by 23.8% to HKD 0.208. The contract sales also rose by 48.7%. If you look at our core business metrics, the sales of development products rose by 69.4%, and the operating fixed asset business also increased by 63.4%. Because of the land price as well as the price capping policies from the government, our development business had a gross margin down to 27.21%. However, for the investment properties, the gross margin rose by 2 percentage points to 69.8%, which is higher in this industry. For the net profit attributable to the shareholders also increased. The fair value is 73%, for the office buildings is 19%. Our business structure is more stable and more optimized. Financial resources are sufficient. Our cash and cash equivalent, compared with end of last year, rose by 6%, reaching CNY 94.9 billion. The EBITDA coverage times is rose to 7.4x. As for the operating fixed performance also increased quite a lot. As I said, that for the shopping malls, it is CNY 6.6 billion, a rise by 65% and up by 3 percentage points. For the hotel, it went up by 111%. In the first half, there is still impact from the pandemic. We will be able to cover all the interest expenses in the first half. According to our test, without major incidents in the future, for all the investment properties, we will deliver about CNY 18 billion. We have a very stable operating revenue through our investment properties. This will provide a very stable support for our continuous growth in the future. We have 73% is from the fixed assets and in the first half cash and the cash equivalent also increased by 6%, reaching CNY 94.9 billion, and debt increased by 17.8%. EBITDA interest coverage times is 7.4 x, and Standard & Poor's, Moody's, and Fitch give us very good ratings, as well as the combined rating is AAA rating. In the first half, the overall financing channels are tightened. We adjusted our own financing channels actively, and the financing costs, based on the low base at the end of last year, goes down by 0.2%- 3.88%. Average debt duration is 4.8 years, and our debt structure was further optimized. This shows the strength in our fundraising. Now let's look at the business performance. In the first half, the contracted sales rose by 48.7% to CNY 164.8 billion. The contracted target locked percentage was over 50%, and the attributable signed contracted amount was CNY 108.2 billion, up by 50%. Contracted the area increased by 52.4%, and the attributable percentage also up to 66%. As for the rentals, we have 48 shopping malls reaching CNY 6.53 billion, up by 65%. The growth rate for the same mall also was high as 6%. The rental rate was up by 1.3 percentage points to 96%. The EBITDA for the shopping malls at the end of the year is expected to be up to 10.7%. For the shopping malls, we have our competitive advantage, and all the business tracks are moving forward steadily. In the first half, for the heavy luxury and the non-luxury shopping malls rose by 87% and 86% respectively. Comparing with that same time, it was up by 83% and 84% in the same period in 2019. Because of the faster growth of the non-luxury shopping malls, our market share increased a greater lot and back to the level before the pandemic. For the shopping malls, we expanded to 48 new shopping malls, and 38 ranked top three in terms of the retailing volume. 20 of them ranked number one in different cities. The number of members also rose by 19% to 17.5 million. Our rental increased steadily. We focus on the core cities and the core street sections in order to guarantee high quality of performance. The rental revenue for the office buildings was CNY 940 million, up by 30%. The rental ratio increased by 2 percentage points. Because of, particularly for the Mixc Lifestyle got listed. Now putting aside the adjustment, then for the office buildings, the total floor area will be about 1.3 million sq m. All of them are in Tier 1 and Tier 2 cities. 59% of such projects are in Tier 1 cities. Hotel business is also recovering. In the first half, the operations revenue for hotels was CNY 740 million, gross margin 7.1%, rental ratio up to 5%. The average price was CNY 1,041 per night, per room. Now we have 30 hotels, and 13 of them are already open. They are in different cities and regarded as leading hotels. As for the Mixc Lifestyle was listed. In the first half, the operations revenue was CNY 4.014 billion, up by 28.1%. Net profit as for the shareholders was CNY 806 million, up by 138%. As for the managed area, rose by 28.7%. The primary property gross margin was 13.3%, and the value-adding services for the communities also went up to 13.2%. We also set up synergies between different businesses so to cope with the growth of the key business. In the first half, we realized the progress in different business sector, realizing CNY 6.36 billion. The municipal construction and operations contributed 94.8% of revenue. Now, let's look at the land bank. We look at the four strategic regions just taking into the amount of diversified channels as well as the low premium, high return policies in the land acquisition. In the first half, we acquired 33 new pieces of land with a total area of 8.38 million sq m. Suitable land area was 7.14 million sq m, with a total price of CNY 91.5 billion. 81% of the land in the high energy Tier 1, Tier 2 cities. For the municipal renovation, TOD, the group synergy, hybrid reforms and so forth, supported our land acquisition. We have 42 new renovation projects and 17 of them are following up with the development to total area of 25 million sq m, actual area of 6 million sq m. 50% of them will be converted into our land reserve within three years. Within five years, 17 of them will be reserved or converted to land reserve, with the total sellable resources at about CNY 150 billion. In the first half, two projects are recognized. In the second half, as one more project will be recognized as the key equity of us as it is in Guangzhou, Xinxi. Three more projects will be confirmed soon. Three 18 years of exploration and practice. We have 85 projects together covering in 34 cities, and it involves 90 railways, as well as the rail mileage about 3,000 km. Now, for the TOD shopping malls, we have 23 of them, and they are located in Beijing, Shenzhen, Shanghai, Hangzhou, Nanjing. In the first half, we added nine new TOD projects with a total floor area of 4.24 million sq m in Hangzhou, Nanjing so on and so forth. As for the synergy land acquisition, this is a very unique land acquisition model, and this gives us a chance to give full play for the parent company from China Resources Group. In 2018, we acquired 12 new projects with a total floor area of 2.91 million sq m, developable floor area 2.63 million sq m. In the first half, we also worked together with the CR bank and acquired a project of Zhuhai China CR Land, the headquarters. We are following up 10 projects in which the Snow headquarters in Shenzhen expected to supply land at the beginning of 2022. Now we have land acquisition in Wuhan, Chongqing, Zhengzhou, Nanjing and so forth. Through the hybrid reform, we can also get more land. Currently, we have about 76 acquisition projects, they're in Tier 1 and Tier 2 cities. As of the end of June, we have sufficient land reserves in our land bank. This will be able to support our continuous growth in the higher quality manner in the future. For the development land reserve is about 59.88 million sq m, 68% of them in Tier 1, Tier 2 cities. The quality is very high. We continue to focus on the strategic cities, the land reserves is about 11.1 million sq m. Shopping malls about 6% in Beijing, Shanghai, Shenzhen, Guangzhou, Nanjing, Hangzhou, Chengdu and so forth, the 30 core cities, 79% of them in Tier 1, Tier 2 cities. Basically, we have fulfilled our national deployment. Now let's look at the prospects. The sellable resources. We have sufficient sellable resources to support our sales target for 2021. In the second half, we have CNY 35.4 billion for sellable resources, 86% of them in Tier 1 and two cities, and 69% of our residentials, and sellable resources about 40% for us to launch. Q3, Q4, we have scheduled our launching plans. As of the end of June, we have signed projects but not settled, is about CNY 23.7 billion, and CNY 11.63 billion will be settled in the second half this year. In the upcoming three years, we will be able to have more settlements to support our growth. The shopping malls continue to expand and at the end of this year, we will be managing 54 shopping malls, and by 2025 it will be 100, with a total area of 12 million sq m. At the end of 2025, we will be managing about 78% of the shopping malls in Tier 1, Tier 4 cities, with the four core city clusters about 5%. In 25 cities, we will realize that one city, multiple projects or multiple city, multiple projects. We take ESG very seriously and for some years, we continuously improving our ESG management level as well as data disclosure. This year we were included into the Hang Seng Index as well as MSCI rating. In terms of environmental, we set up a working group to promote the dual carbon strategy. We looked at the green construction, the energy management and so forth. In the first half, we promoted the energy consumption down as well as the Green Construction Certification program. For every 100 business revenue, we reduced about 22.1% of energy consumption. In the first half, we undertake the 11th Hope Town in Yan'an, and it is about 217 mu and about 167 families, about 563 people benefited from them. We accumulated donations about CNY 29.7 million. We also echo to sponsored major events in terms of planning, construction, operations and so forth. In terms of pandemic control in the first half, we provided services to about 600,000 people in vaccination. We also provided services to all the protections and zero infection happened. In terms of governance, we set up our ESG structure. We set up an ESG committee. We also prepared the first ESG management manual, so that we provide the information, the definition and explanation, as well as the consolidation of the ESG performance evaluations and so forth. At the same time, we also keep improving the diversification of our board meeting. The last part of the PPT is some appendix for your reference. I wouldn't go into the details of this appendix. Thank you very much. Thank you very much, Ms. Guo, for your detailed performance presentation. We're going to have the Q&A session. Please press zero one to ask the question. To wait for your question, please identify yourself before you ask the question. For the interest of time, each person is allowed to ask two questions maximum. Now let's invite the first question. Thank you. The first question is from CICC, Eric Zhang. Thank you. Good afternoon, management. I'm Eric from CICC. I have two questions for you. The first question is about the strategies and the tactics. From the mid to long term, currently, the market situation is still going very fast with the market shuffling. For CR Land, you have your competitive advantages, such as diversified sources of land acquisition, the low fundraising cost, and so on and so forth. You do have a very strong competitive advantage in these areas. My question is, how will you give full play to this strength and turn them into, for example, in the mid to long run, to support your continuous growth? In the short term, from a tactical point of view, because of the policies and the changes in the market, a lot of the quick changes, what deployments and what plans do you have to cope with the new policies and the changes in the market? This is the first question about strategy and the tactics. The second question is about the market cap management and the share price. I understand that your share price is seriously underrated, its market cap is about CNY 178 billion. To calculate and conceptually, your investment property is already over CNY 180 billion. It is basically at the same level for market cap. You buy the sale land market share. 70% of your projects, they are in Tier 1, Tier 2 cities and your land reserves. From the profit point of view, in your net profit this year, maybe for the IP and the investment property, you have about CNY 5.3 billion. If it is 20x PE, it is already exceeding CNY 100 billion valuation. That means for the investment business. Now it is even below the 4x PE. At this valuation level, I just wonder how the management thinks about the secondary market. How do you think that you will manage your market cap? Thank you. Thank you, Eric, for your questions. Very good questions. Let me try to answer them. It's true that recently, actually, for a pretty long period of time, the government's policy is the housing are for living, not for speculation. This is the basic tone of our macro policies. We have the Three Red Lines policies, centralize the land supply, as well as the 2% controls on the loans. We just feel that we have to adapt to the new policies and keep renovating and developing. This has already become the mainstream tone for all the developers. Based on the 13th Five-Year Plan and 12th Five-Year Plan, the 13th Five-Year Plan, we are also establishing our overall plan for the 14th Five-Year Plan. During the 14th Five-Year Plan, we will stick to our strategic positioning of the municipal space operations provider, as well as the 3+1 business model. For the development business and the land assets business, as well as the commercial business and so forth. As well as our One Ecology Business, so that we can set up synergies between different segments. With the ultimate purpose to set up our own ecology being a municipal space operations provider. This is our overall plan for the 14th Five-Year Plan, with the very good foundations during the 12th and the 13th Five-Year Plans. Our overall strategy for the 14th Five-Year Plan, as well as our master plan, is that at the end of the 14th Five-Year Plan, we will strive to double our revenue. As for in terms of our business size, we hope that we can maintain to be one of the top 10 developers. In terms of the overall strength, we hope to continue to be number one. With the listing of Mixc Lifestyle Services, we rank number one of all the SOEs. This is our overall plan for the 14th Five-Year Plan. Under this, we have our detailed plans for our strategic measures. For example, the strategic investment as well as the production operations and building the technical innovation, the financial innovations and so forth. Meanwhile, we also carry out the hybrid reform, the project M&A, so on and so forth, different measures. At the same time, we will focus on improving the supply chain quality, as well as the asset securitization, the management, as well as making a young management. Meanwhile, we also look at the motivation in the company as well as the organization optimization. After about 20 years of growth, we kept innovating and growing in a high-quality manner. Compared with other peers, we have already established our differentiated strategic competitive advantage. Number one, we have leading diversified business tracks in the industry. For this, I think this is a very important characteristic we have. To put it another way, we are not simply a developer. We are a municipal investment and operations service provider. We have three business tracks and one ecology, and from four dimensions in the 12th and the 13th Five-Year Plan, while we grew our business, we realized very good results and laid a very good foundation for our future growth. The second capability we have is that we have already got the competitive low-cost and high-quality construction capability and high capability for deliveries. This is also very important. This will affect how long we can grow our business sustainably. Number three, we have the low fundraising cost, as well as the high fundraising capability. This is the third characteristic we have. After 20 years of growth, we have established this differentiated competitive strength. Now we're in a new era, and we have already got a very good foundation and very good capabilities, as well as the business segments. We hope that through our efforts during the 14th Five-Year Plan, we can realize high-quality, stable growth in our development and sales, and to grow our operating fixed assets business, as well as our light assets management services. We can keep improving our ecology, the key factor business, so that in the 14th Five-Year Plan, we can realize high quality for overgrowth in all business segments. This is my answer to your first question. Your second question is about share price. The underestimated or undervalued of share price. For the whole property industry, I think that the share prices are going down. A lot of share prices from a lot of developers are going down. I think it is the same with the CR. It is seriously undervalued and below our net assets. Perhaps this has a lot to do with the short-term policy adjustments, as well as the investors' confidence. Our valuation is now at a very low level, but our judgment is that real estate industry in the future, from a mid- to long-term, it is still a very good industry, a very big industry. You can see the demands and their growth. You can also see the growth. As Mr. Guo said, it has a high visibility. From mid- to long-term, we have confidence in this industry. I believe that the valuation will be recorrected. As for CR Land, in terms of the market cap management and the share price management, what measures do we have? Personally, I think that we have very simple ideas about it and very pragmatic ideas as well. We must manage our business well, we must manage our operations well. In this industry at this time point, we must stick to the strategy and the long-term strategy, manage our investment well, so that we can manage our production, the operations, and keep improving our efficiency and keep improving our capabilities. We must deliver good and stable growth in the Mixc Lifestyle, so that for CR Land, we can sustain our business and keep growing our business bigger and deliver a better performance than the overall market. From the market cap point of view, as well as value management for the listed company, we do care the capital operations and how it is done. A lot of companies, they are purchasing back and the management shareholding scheme increase their shareholding and so on and so forth in order to push the value management. We also take it very seriously when it is necessary. From increasing the long-term value of our shares in terms of value management, we will take some measures. Thank you. Thank you, Mr. Li Xin. Next question, please. Thank you. Next question is from UBS, John Lam. Thank you. Good afternoon, management. First of all, congratulations on your interim results, including your dividend. It's a very good message to the capital market. I have two questions for you. The first one is. Can you please speak louder a little bit? I cannot hear very clearly. Okay. The first question is about gross margin, whether it has already pushed the bottom, and also margin for the non-public channels and the public channels. What is the net profit margin for the land acquisition, and what is the difference between them? Second question, Mr. Guo Shiqing talked about the interest as well as the rental coverage is already about one time. Are we expecting more dividend payout? Thank you. Thank you for your questions. Two questions will be taken by our CFO, Mr. Guo. Let me take your two questions. For this industry, all the investors concerned about the gross margins. I want to take your question from three perspectives for the gross margin, whether it's already the lowest. We looked at our gross margin in the past five years and also look into the future, the five years in the future, of the gross margin of development business. In 2018, for CR Land and for the whole industry, it was at the peak level. 2019, 2020, and 2021, the gross margin has been going down. In 2021, 2022, we estimated that the 2016, 2017, 2018, the land acquisition, the cost was super high, the margin will hit the bottom, whether it will rebound, we will just wait and see. Currently, the gross margin is about, in your second, about the public channels and the non-public channels, what is the net margin? If it hits the bottom, in the past, we acquired land with high price and the high cost has been absorbed. This year, the gross margin will continue drop a little bit. For the new land acquisitions, we can maintain 10% of net margin, then the gross margin will be something around 19%-20%. In our own judgment, in the year, the gross margin will be in the L-shape. It hits the bottom and in the future, for some period of time, the gross margin will, including for the new land acquisitions as well as the existing land reserves, the gross margin will be something around 20%. Your second question is about dividend payout. Currently, our dividend payout is 37%. Currently, the dividend payout ratio is 37%. From this year on, if we take the CNY 18 billion of rental gross revenue, and it will be able to cover based on this 37%, after the fundraising, it will be able to cover all the costs. In the future, in my report, I already said that currently 48 shopping malls are running and at the end of the year, we will have 54 shopping malls, and in 2025, we have about 50 shopping malls during the 14th Five-Year Plan. This is a high investment period. Our fundraising is low. The fundraising cost is low because of the Three Red Lines policies. Our fundraising cost as well as the fundraising size cannot be very big. In order to sustain our development business, the dividend payout ratio will be maintained at a stable level. Thank you. Thank you, Mr. Guo. Next question, please. Let's invite the next question. Next question is from JP Morgan, Ron Leung. Mr. Li, management, good afternoon. I'm Ron from JP Morgan. I have a couple of questions for you. The first one, just a follow-up question about the gross margin. Back to March, as you said that perhaps some dividend this year will be about 25% of gross margin, and you said this in March. Maybe next year, as Mr. Guo said, for the new projects, about 20% of margin and it will hit about 20% next year. One thing I'm confused. In the presentation, you talked about the channels, diversified channels of land acquisition. I just feel that if it is 20% of land acquisition, then it will be the same as the whole industrial average. You spend so many resources in acquiring the renovation projects. You also had a lot of TOD projects. In this case, I just feel that you don't have any practical, in terms of accounting, it is not meaningful. If you look at the Nanjing TOD project, we did the calculation. Taking the upper price, and so we actually could realize a 30% for gross margin. My follow-up question is that looking at the gross margins, how should we look at it? This is the first question. The second question is that. For the growth of profit, what is your opinion? What is your take? The 14th Five-Year Plan, your target is double. They must maintain very high speed for sales increase, about 15%. Maybe you can overheat this target, if the gross margin erodes their net profit, how do you think about the profit growth? I just feel that for the 1209, it's growing very fast, as Mr. Li Xin said. It is a new driving force of profit growth. I do think that the net profit will also grow faster. Two, three small questions. In Hong Kong, you have a lot of high-end projects. I just want to know that in Hong Kong, what is your launching plan? Three questions. Thank you. Thank you, Ron, for your questions. Your first question and the third question, I will take them, and the second question will be taken by Mr. Guo Shiqing. My understanding regarding the first question is about the non-public markets, for example, the M&A, actually, this is a renovation project. The land acquisition, the gross margin could be higher, whether our margin overall will be improved. Actually, can we further improve our gross margin? Personally, I think as for the municipal renovation, as well as the M&A projects, actually, you can take reference for the land auction practice, definitely the gross margin is higher. As for the project acquisition and municipal renovation, it takes a longer time to implement, and there are some uncertainty in this process. From our strategic point of view, we hope that through a diversified land acquisition channels, from the investment point of view, we can realize the higher gross margin for the investment for the development projects. Better land, the higher gross margin. This is the direction we are working for. This is also our vision. Secondly, I said it repeatedly about the improvement of the system building, as well as the high efficiency in production operations. This is also a very important measure for us to improve the gross margin. We actually have been doing a very good job in this area. Comparing with the benchmark in the industry, in terms of reducing the costs and the fees, the selling fees, sales fees and SG&A, as well as the cost management of residential properties and the cost management of the city complexes, this is still a big room for us to improve. I think as Mr. Guo Shiqing talked about the macro trend for gross margin, and what I'm talking about now is about regarding your question, what we do internally. We do the investment well. We enhance our control measures internally, as well as efficiency improvement internally. As I said, in terms of management, we don't have any extra skills. We are simple. We are pragmatic. We hope that we do a better job so that we can improve our returns to our shareholders. Your second question about the projects in Hong Kong. We are launching the projects in Hong Kong according to our schedule. The Kado project will be launched next year. As for other projects in Hong Kong, they are undergoing according to our schedule. Our investments in Hong Kong. As all analysts know, the developments of those projects in Hong Kong, the development cycle is longer, and basically, it's within our schedule. The most important, the first project for Kado, will be available for launch next year. Thank you. Mr. Guo. A little bit more about the gross margin. For just now, I talked about the gross margin for the whole industry, and now I want to add a little bit more. If you look at CR Land, you have to look at our gross margin overall. Let me share with you some data. For the self-holding properties, hotels, office buildings, and the property excluding the long-term rental, the gross margin is 69%, and this business size is getting bigger and bigger. In June this year, we can realize CNY 18 billion of rental in the 14th Five-Year Plan with a 20% of growth is no problem. This is expectable. For the operations properties. This morning, maybe you listen to the results announcement of Mixc Lifestyle. The overall gross margin is about 30%. Putting all these business segments together, we are different from other developers. You can expect that our overall gross margin will be around 25%. In the long run, it must be above 25%. Maybe for one particular year, it is a little bit below 25, but in the long run, on average, it will be above 25%. Our business revenue this is a bit above CNY 200 billion, and with 10% of growth each year and 25% of gross margin, the gross margin will be about CNY 75 billion, plus what Mr. Li said, in other business, we did some adjustments. For example, cost reduction, efficiency improvement, the net profit will be even bigger. If you want to look at the profitability and the profit-making capability, you must look at all these big business segments together. This is my additional opinion on the gross margin. You talked about the profit growth during the 14th Five-Year Plan. During this Five-Year Plan, be it the development project, the business segment, or at the end of the Five-Year Plan, we will realize about CNY 30 billion of rental revenue. Under the pandemic, it is very likely that, of course, the impact is still here, but if things are good, we can realize this target, no problem with that. As for the development properties, looking at the first half as well as the whole year performance, we don't see any difficulties of hitting our target. At the end of the 14th Five-Year Plan, the CAGR will be around 15%. Currently, we still have some resources, including our reserves for sales as well as financial resources. In the market, if there are some new changes in the future, there will definitely be new opportunities. In the public market, we acquire land during the 14th Five-Year Plan. Our business revenue in the core net profit growth, it won't be easy, but definitely there will be new opportunities in the market. In 2021, in the past few months, we have already seen some opportunities, including what I said in my report, the M&As and the hybrid reform and diversified land acquisition. Currently, we feel that it's very likely that we can hit the target for the 14th Five-Year Plan. Thank you. Thank you, management. Next question, please. Next question is from Griffin Chan of Merrill Lynch. Mr. Li, Mr. Guo, good afternoon. I'm Stephen, and I have three questions for you. The first question, just now, Mr. Li said, is about the motivation. Do you think that it is very important? At the headquarters for different regions, can you please share with us more about your plans? For the option plan, how is the plan and how do it? The second question about social responsibility. Recently, people may have already heard a lot about getting rich together. For China Resources Land, when you fulfill your social responsibilities, what is your take on the getting rich together policy? What does it mean to China Resources Land? This is the second question. The third question is about the municipal renovation. Recently, there's new policies about the dismantling and construction policy for the municipal renovation. Do you think that the new policy will bring some impact to it? Thank you. I will take your second and the third question. Mr. Wu Bingqi, our Chief Human Resources Officer, will take your first question. About social responsibilities, your question is about getting rich together. For this topic, I think there's nothing wrong with this policy, talking about getting rich together. To put it in a simple way, we must have a bigger middle class in the middle part with the medium to high level of income. This is important for the policy for getting rich together. With a bigger middle class, we can bring along the poor to get rich as well. China's economy, in the long run, be it doesn't matter. We have the dual circulation policy and our economic growth from mid to long term is expected to grow very fast. If you look at our GDP growth in the first half, it's over 10%. Definitely no problem with this 6%-8% of GDP growth at the end of the year. Stable, healthy growth in the long run of Chinese economy will definitely bring along the income level improvement for the citizens so that people can get rich together. Don't get mistaken about this getting rich together. It's not right to think it differently. This is what the government built the whole society to let more people be rich, and so that they can live a better life. From this perspective, this is my understanding of getting rich together. I think for the real estate market, consumption, living, and the improvement of living, these types of demands will definitely be bigger and more. As for the consumption upgrading, we will also see more demands for that as well. This is my reply to your question on the getting rich together from the real estate and the consumption market point of view. The third question is about the municipal renovation. Our key market for the municipal renovation is mainly from in Shenzhen, Guangzhou, Dongguan in South China, some key cities in South China. Currently, all our projects are undergoing normally without any influence from the market. A lot of projects we have involvement from SOEs. While we deal with the governments, because the government believes the strength from the SOEs, as well as their reputation, their capital strength, so on and so forth. The government is more confident on SOEs. As for the dismantling and the construction practice, the government doesn't encourage massive dismantling and construction, because they worry that some projects may cannot be completed well. This doesn't mean the sale land at all. Thank you. Next, Mr. Wu Bingqi will take your third question. Let me try to answer your third question. Just now, Mr. Li emphasized repeatedly that the organizational change and the motivation change, these are the key driving forces for China Land, with the purpose of improving the organizational capability and making sure that we can realize our goals for the 14th Five-Year Plan. We have considered about the organizational structure, the personnel structure, as well as the remuneration structure or compensation structure. You talked about the regional, the headquarters, and the different affiliates, the relationships. We will simplify the whole structure. From the headquarters to the big regions to the cities, we will set up a two-tier headquarters so that we can keep improving organizational capabilities. At the headquarters, we'll build up the professional and expert-based platform. For the big GL, we will set up a business performance platform to fulfill the business performance requirements. As for the cities, their facility teams, they will deliver the results. We will also look at our talents as well as the evaluation and the compensation system, for we will retain the best performers and phase out those poor performers. From the headquarters to the lower level, we emphasize about the result-orientated motivation mechanism. Depending on your contribution, we explore the option plans as well as some specialized bonus system to making sure that from short-term, midterm, to long-term, we have the different motivation methods so that we can realize our business results. Thank you. Thank you, management. Next question, please. Thank you. Next question is from Merrill Lynch. Karl Choi. Thank you, management. I have two questions for you. The first one, about land acquisition. Recently, the central government issued a policy for the key developers. Every year, the money they spent on land acquisition must be within 40% of the sales. According to my calculation, for sale land, it's already over 6%, including IP. I just want to understand what are the percentage points respectively, what will be a land acquisition policy? Will it change? How can you guarantee that you can hit the 14th Five-Year Plan goals? Second question about costs. As you know that people concerned about the cost. I realize the cost rose very quickly. Of course, the sales also went up very quickly, which is in line with each other. What about the cost increase for the whole year? Thank you. Thank you for your questions. Our Strategy Officer, Mr. Xie, will take your question. The second question will be taken by Mr. Guo. Thank you. Your first question is about the land policies, the eligible land acquisition cost from Central government's policy within 40% of the eligible sales. Actually, this has been a reference for all the developers. Definitely recently from the Central government point of view, this reference has been further become more and more specific. As for the CR Land, some of this quota is put into the IP part. For CR Land, if we put aside the IP part, and according to the Central government's requirement, basically, it is 40% for CR Land as well in the past year. Sometimes it's a little bit above 40%, sometimes below 40%. Since there's such a requirement for Central Government for CR Land's investment, for our investment strategy, this doesn't influence much. As for the whole market, if we implement this policy strictly, this may lead to the fact that some developers, if the equity, the land acquisition cost is above 40%, then those developers, they will have less capital to acquire land. I think the purpose is for the Central Government to stabilize the land cost. Therefore, for CR Land, from a land acquisition point of view, it is in our favor. Let me take your second question. It's about the costs and the fees. This is a very good question. Just now, Mr. Li already said that during the 14th Five-Year Plan, also considering about the gross margin and improving the core net profit. SG&A increased by 39%. The management cost increased to 39%. The sales cost increased to 27%. For the contracts assignments, for the contracted amount increased by about 40%. The SG&A compared with the previous year dropped a little bit. There's another point. We did some comparison with other developers. In terms of SG&A, we do have some room to further reduce it. In the future for our business mix, for example, the shopping malls and the hotels, and so on and so forth, once it is open for business, particularly the hotels and the labor intensive residential properties are also labor intensive. Every year you open a new property, you need to engage more people. Your management fee will also be more. That's why you can see there's such increase. In the future, through the organizational change by benchmarking with the peers and learn from others, we will take the SG cost reduction seriously. In the second half, we hope that the SG&A can be managed better than the first half. Through the organizational change in the future, for example, at the end of last year and the first half of this year, we already started to change our organization, hoping to have a better efficiency. The next year and the year after next year, you can see that our efficiency will be even higher. That's why we also take these two costs and fees very seriously. Thank you. Thank you, management. Next question, please. Thank you. Next question is from Daniel Wong at DBS. Good afternoon, management. I am Daniel Wong from DBS Bank. Two questions for you. First question is about land acquisition. For the green category of developers, you have a 15% room, right? Compared with other companies in the first half, in terms of a land increase, you have already used all your quota. My question is, in terms of a debt increase, what is your take in the second half? People usually think that there will be more opportunities for land acquisition in the second half. Do you think that you are going to issue more bond, more debt in order to acquire land? My question is, will you maintain the same speed of land acquisition? Are you going to increase more debt in the second half in order to acquire more land and have more sellable resources? This is the first question. The second question, just now you talked about in the M&A, in the hybrid reforms and so forth to help with the 14th Five-Year Plan. In the M&A market, there are more and more opportunities. What is your strategy for M&A? Will you consider some big developers in the industry acquiring some assets or assets packages? There are some rumors in the market saying that there will be some massive M&As. Thank you. Thank you, Daniel, for your questions. I will take part of your question for the first question. Mr. Guo will take the debt part, and will take your second question as well. In the second half about the speed of land acquisition, I don't think it is appropriate to say it fast or slow because the land supply policy is different. It is changing now. For CR Land, as well as other developers, we are facing with new land supply policies. There are challenges, as well as the challenges for our capabilities as well. This is the fact, and this is reality. The premium rate, maximum of 15%, otherwise we will have the lottery model or the bidding. This is a new policy, and it will be in place just like a normal practice. In terms of land acquisition capability for CR Land, we must set up our own standard products and how to compete. This is something we have to do now. Secondly, in the second half, talking about our investment, we will definitely put returns in priority. When we look at an opportunity, this involves which cities to go. It's not that we go to every city once there's a land supply. If it fits for our strategic focus, we will consider to go. If the return estimation is suitable for us, if it is at the right location, in the right city, and for the right target customers, we will consider. These are the things that we'll consider, these are the overall considerations for us. It is more dynamic. This is the second point. The third point is that financial prudence is always important. If you look at our ratings, the BB B, this is the bottom line for us. For CR, we have a three-plus-one business model. This is our positioning as well. We will choose the right targets. In the second half, we will maintain our own investment strategy and pace of investment to choose the right target and go. Hybrid reform and M&A, it's true that there are a lot of opportunities, and we have already conducted discussions with some of them. I believe that in the future, the major direction will be from the project-based M&A. This will be the mainstream practice and the hybrid reform of SOE platforms, this is another mainstream direction. In terms of M&A, we will not take too many risks. For M&A, we will be keep prudent, yet productive. Thank you. Let me take your debt-related question. In the balance sheet, you can see that we have different constraints about the debt level. Called the Moody's. Moody's, if you look at the ratings, we have different ratings from different organizations. For the Three Red Lines, we have to follow the Three Red Lines requirements. For the green category developers, you can only increase 15% of new debts. We have already issued about 12.5% of new debts already. We don't have much room to increase more debts. In addition, I want to say that in addition to debt, in order to sustain our development, for example, the renovation, the land acquisition, we need more resources. We need to optimize our structure. Internally, we have to control the cash flow well, including, for example, the assets we're holding, and for the low efficiency stock, we have to deal with them well. Thank you. Thank you, management. Next question, please. Next question is from BOCI, Tao Yu. Thank you, management. I have three questions for you. The first question, just now talked a lot about diversified land acquisition channels. I want to take this opportunity by asking you, because you have been operating T ier 1, Tier 2 cities where there's a centralized land supply now. On behalf of the capital market, I just want to ask you, what is take on the 2.0 version of centralized land supply, how to control the land cost? Is it through the lottery only to control the land cost? Because perhaps there will be additional cost through the centralized land supply. If it is through lottery for the developers, how can they maintain their competitive advantage? For the leading developers, they may not give full play to their competitive advantage. What is your take on this? Under this centralized land supply policy, what strategies to have if you want to control the real land price? For the leading developers, do you think that there will be some influence to it? This is the first question. Second question is about diversified land acquisition channels. Actually, we have already seen that for the SOEs, they do have advantage in getting land. Along with more and more competition in the public market. I do think that the private companies will also try such diversified land acquisition channels. We have felt that the SOEs have the advantage. Can you please elaborate a little bit more on that in terms of diversifying the land channels? What is the entry level? To what extent do you feel that it is safe for you? You don't feel any challenge from the private companies. The third question about retailing. While the pandemic is improving, the overall situation is improving, have you seen any change of the retailing sector, for example, the heavy luxury sector? Do you think that it is improving? While we're recovering from the pandemic, have you seen that the retailing growth is higher? Thank you. Thank you for your questions. For diversified land acquisition, I will say Mr. Zhang Dawei will take these two questions. About the retailing structure and the retailing under the pandemic, Mr. Yu Linkang will take this question. Your questions about land acquisition. If I do not answer your question well, you can follow up your questions. My understanding is that we have the 2.0 version of our centralized land supply for the purpose of controlling the land price, and 15% of our premium you may choose a lottery to get high quality of land. For this, we must follow the one city, one policy scheme from the central government. For China Land, we hope that we can follow this practice, from the product efficiency and the return perspectives, we can improve our overall capabilities and the return levels. We hope that from the 14th Five-Year Plan, the production operations, the improvement, we can keep improving our organizational capabilities for all teams. Along with the two controls and the three improvements, we can cope with this opportunity and the challenge well. We think that it is more like an opportunity for us to keep improving our overall performance and the efficiency and quality, as well as returns. At the same time, control the risks and the costs well. Talking about the improvement of our efficiency. For example, improve the launching efficiency, the delivery efficiency, so that we can have a higher level of efficiency performance. In terms of quality improvement, so through high quality for plans, we can keep improving the satisfaction from our customers, the delivery of satisfaction and all the customers' satisfaction, as well as their products' quality. This is a strategic theme for us so that we can keep improving our product level. For China Land, we have 30 projects. Those projects are the results of our diversified land acquisition. Those projects are also more marginal with higher profit margin, so they are the benchmark projects in the upcoming two years. Through these projects, we can reshape our products. Through reshaping of the products, we can establish our own product lines and standardization. We will also research on the customers as well as the centralized purchase of engineering projects so that we can keep improving the efficiency as well as the product competitiveness. Through these measures, we can keep improving the quality, the returns, and efficiency levels so that China Land can be more competitiveness. If this in turn helps us acquire land, or be it the high quality, be it the lottery or not, we hope that we can keep improving our own efficiencies. I hope I have answered your question. Let me take your question about the retailing part. From the outbreak of the pandemic last year, everybody knows that even in China, so far we are the best in preventing the COVID-19. From the 2nd half last year, in the retailing market, we already saw a recovery of the retailing market in this 1st half, along with better controls of the COVID-19. The different business are showing very good recoveries and a strong growth. If you look at the different business segments. The entertainment sector is the one that has the highest level of growth. Of course, because of the control measures last year, we didn't have a lot of entertainments and the cinemas were closed. A lot of entertainment activities had to stop. A lot of our businesses had to stop because of the pandemic. Now everything is recovered, and we saw 250% of our growth in entertainment sector. For other business sectors, including the commercial and personal cares and so forth, we saw high growth as well. Just now, you mentioned about the luxury brands, the international brands. The growth compared with the same period last year, over 100. It's a 107% of our growth. This is the overall growth, as we said just now. For the heavy luxury shopping malls, we had 88% of our growth than the same period last year. Non-luxury shopping malls, also 84% of our growth. This is an overall recovery in this business sector. This is also a comprehensive growth for the retailing sector. You also mentioned that according to our observation in Hong Kong, the border restrictions are not lifted yet. We noticed that in the news that the border restrictions will not be lifted until March next year. As we communicated to you before, even though the pandemic is controlled very well in Mainland China, but internationally, international traveling, there are still a lot of difficulties. The longer the borders are closed, I believe that the consumers' consumption behaviors, as well as our membership system, is coverage, as well as the services we provide to the consumers. We believe that we will continue providing services to our members. When the pandemic situation is better, our overconsumption momentum will not be influenced that much. Thank you. Thank you, management. For the interest of time, I would like to invite the last question. Thank you. The last question is from Haitong International, Andy. Good afternoon, management. I just have a small question for you. This year, you spent about CNY 74 billion in land acquisition. Andy, I'm sorry. Can you speak up a little bit? We cannot hear you very clearly. Can you hear me now? Okay, better. Thank you. I noticed that this year you acquired more land, about CNY 74 billion in acquiring new land. Last year, it was CNY 39 billion for land acquisition the whole year. I just want to understand, this such increase of land acquisition expenditure, what is the rationale? Thank you. Our Chief Strategy Officer, Mr. Xie, will take it. Thank you. This figure in the first half, the equitable is about CNY 74 billion. We have a partner, is the equitable land acquisition. If we put aside the partners, our own expenditure is about CNY 63 billion. This is number one. Secondly, in the first half, we acquired more land, is true. Generally speaking, those are high quality of land. For example, the 85% of them are for residential buildings. Therefore, residential percentage is very high, is ideal one. For land acquisition for the strategic shopping malls, we acquired in Zhengzhou, Changsha, Hangzhou, Wuzhou, Shaanxi, Shenyang, Nanjing, so on and so forth. There are six strategic shopping malls. Some of them are actually a result of a long-term discussion, and we bought it this year in the first half, and a very good opportunity for us. That's why we acquired those pieces of land. Third point is that, we were asked just now for the net profit of the sales properties. Is something between 11.4%-11.5% is the net profit margin for the land we acquired in the first half. This is the net profit margin, which is also very good. Generally speaking, in the first half, we implemented our strategy of the result-oriented investment strategy. We also fulfilled the financial stability requirements when we acquired land. For the first half, for all the land we acquired, generally speaking, they have very good quality. In the second half, along with the government's determination of stabilizing land cost according to the Three Red Lines, four categories, there are two centralization policies, as well as the equitable contract volume, as well as the land acquisition expenditure requirements. We think that in the second half, the land acquisition may go low. In the first half, we captured the very good opportunities, and we enriched our land bank. At the same time, in June, July, and August, we controlled our pace of land acquisition purposely so that we could be more cautious in land acquisition, particularly in the following month, in the second half of this year, along with the price going down. That we can keep an eye on better opportunity in the market. In the first half, we did a good job capturing the opportunity. Meanwhile, we were also watching very carefully for the second half. Thank you. Thank you, management. It's almost time, and it's about 1.5 Hours of interim result presentation. Thank you very much for all the questions from our investors. This is the end of the interim results announcement. If you have any further questions, please feel free to contact our team. Once again, thank you very much for your time, and thank you for your support to China Resources Land. I hope that you are satisfied with the company's performance and hope that you are also satisfied with the communication today. Thank you very much. Bye-bye.