Core Viewpoint - The company reported its 1H25 performance, showing a revenue of 23.2 billion yuan, a year-on-year increase of 10%, while net profit attributable to shareholders decreased by 31% to 1 billion yuan, aligning with expectations [1] Revenue Performance - Revenue growth was supported by core business operations, with property management service revenue, which accounts for about 60% of total revenue, increasing by 7% due to a 6% year-on-year growth in managed area to 1.06 billion square meters [1] - The "Three Supplies and One Industry" segment saw a significant revenue increase of 52% year-on-year, contributing to overall revenue stability [1] Profitability Pressure - Profit margins faced pressure, with several business segments experiencing a year-on-year decline in gross margins, except for value-added services [1] - The decline in profitability in the large property management segment was attributed to lower gross margins from newly developed projects, a return to industry average margins for some high-margin existing projects, increased investment in problematic projects, and changes in the structure of value-added services [1] Cash Flow and Financial Health - The company's operating cash flow was weaker than the previous year, with a net cash outflow of 880 million yuan in 1H25 compared to a net inflow of 270 million yuan in the same period last year, primarily due to increased upfront investments for the "Three Supplies and One Industry" business and a decrease in prepayments from owners [2] Future Outlook - The business is expected to face internal and external pressures, but the management's refined management measures may help mitigate some external impacts, maintaining relative stability in core operations [2] - The management aims to achieve the revenue, profit, and cash flow targets set at the beginning of the year and plans to actively return results to shareholders [2] Profit Forecast and Valuation - Based on the actual operating conditions in the first half of the year, the company slightly lowered profit margin assumptions for several segments, reducing the core net profit forecasts for 2025 and 2026 by 19% and 21% to 2.59 billion yuan and 2.62 billion yuan, respectively [2] - The target price was adjusted down by 4% to 6.8 HKD, reflecting a 5% upside potential and an 8x price-to-earnings ratio based on core net profit for 2025, along with a 7.5% expected dividend yield [2]