1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Overall, the operating performance of REITs in the second quarter basically continued the expected trend. The REIT market experienced an overall correction after the release of the second - quarter reports, similar to the situation after the first - quarter reports. The correction occurred during the period of investors' risk preference conversion and the rotation of major asset market trends, with a relatively small weight on fundamental pricing. In the short term, the overall REIT market may still be dominated by its bond - like nature, and long - term investment value exists for some projects and investors [3][6][11]. 3. Summary According to the Table of Contents 3.1 Second - Quarter REIT Performance: The General Trend Remains Unchanged, with Minor Differences - Most projects in the affordable housing, consumption, and municipal environmental protection sectors maintained stable operations. The overall occupancy rate of the warehousing sector increased marginally, but rents were still under pressure. The industrial park basically continued its previous operating trend, and there were internal differentiations in the highway and energy sectors [11]. 3.2 Affordable Housing: Steady Growth - The overall operation of the affordable housing sector remained stable. For rental - allocation projects, the occupancy rate and rent basically increased steadily. Some projects had different performance due to factors such as expansion and tax policies. Market - oriented rental projects also had stable operating indicators [12]. 3.3 Highway: Seasonal Decline and Differentiated Impact of Road Networks - In the second quarter, there were differentiations in revenue and operation among highway projects. Seasonal changes and road network changes were important influencing factors. Some projects were affected by new competing projects or road reconstruction, while others benefited from road network improvements [19][21]. 3.4 Energy: Differentiation under the Intersection of Multiple Factors - The revenue and operating indicators of the clean energy sector had a relatively high volatility. Some projects benefited from the rapid growth of power - on - grid volume, while others were affected by factors such as low light resources, competition, and power grid maintenance. However, some projects improved their distributable amounts through measures like factoring national subsidy accounts receivable [26]. 3.5 Municipal Environmental Protection: Overall Stable - The overall operation of municipal projects remained basically stable. Some projects were affected by factors such as non - heating seasons, changes in waste generation, and tax policies [31]. 3.6 Industrial Park: Continued Pressure - The industrial park basically continued its previous operating trend. Industrial plant projects had relatively stable occupancy rates and rents, while most R & D office projects faced situations of "trading price for volume" and "decline in both volume and price" [11]. 3.7 Warehouse: Marginal Stabilization - The overall occupancy rate of the warehouse sector increased marginally, but rents were still under pressure [11]. 3.8 Consumption: Seasonal Decline but Overall Strong - Some consumption projects reported a marginal decline in rent, which might be related to the seasonal decline in mall turnover and the reduction in rent commissions [11].

Core Viewpoint - In 2024, the real estate industry is undergoing significant restructuring, with the number of billion-dollar real estate companies decreasing to 11. China Merchants Shekou (001979.SZ) stands out with a total sales amount of 219.3 billion yuan, ranking fifth in the sales list by CRIC, demonstrating resilience and maintaining its position in the top tier of the industry [1][2]. Financial Performance - As of the end of the reporting period in 2024, China Merchants Shekou reported a cash balance of 100.35 billion yuan, an increase of 12.06 billion yuan or 13.66% year-on-year. The cash-to-short-term debt ratio improved to 1.58, up by 0.3 [1]. - The company achieved a total signed sales area of 9.359 million square meters and a signed sales amount of 219.3 billion yuan in 2024, with a peak monthly sales amount of 30.239 billion yuan in December [3]. Land Acquisition Strategy - China Merchants Shekou focuses its land investment strategy on first-tier and strong second-tier cities, particularly in the "Strong Heart 30 Cities" and "Core 6+10 Cities," with resource allocation increasingly directed towards cities like Shanghai, Hangzhou, Beijing, and Shenzhen [1][2]. - In December 2024, the company invested 10.115 billion yuan to acquire eight premium land parcels in core cities, with a significant portion of rights in two parcels in Baoshan District, Shanghai, reaching 70% [2]. Asset Quality and Product Development - The company proactively recognized asset impairments totaling 5.9 billion yuan, which may impact short-term profits but is expected to enhance asset quality for long-term stability [3]. - China Merchants Shekou restructured its product system with a "Chief Designer Product Manager System," launching four product lines to better meet market demands. In 2024, it delivered 95,000 housing units and upgraded its "Delivery as Service" system [3]. REITs and Operational Strategy - In 2024, China Merchants Shekou's rental housing REIT (code: 180502) was listed on the Shenzhen Stock Exchange, raising 1.3635 billion yuan with a subscription multiple of 103.66 times, marking a new high for the year [4]. - The company has established a comprehensive REITs layout across three major asset operation sectors: industrial parks, long-term rental apartments, and commercial offices, revitalizing over 14.2 billion yuan of existing assets since 2019 [4]. Property Services and Technological Innovation - The property service arm, China Merchants Jiyu, has enhanced operational efficiency through AI technology, achieving a fivefold increase in work order efficiency and covering 97% of projects with high-altitude object warning systems [4]. - The company continues to deepen its Integrated Facility Management (IFM) sector, managing over 36 million square meters and serving high-profile clients like Huawei and Alibaba, consistently recognized as a "Gold Medal Supplier" in back-office services [4].