The corporate credit rating on Longfor reflects thecompany's rapid growth strategy and short track record as alarge-scale developer. In addition, Longfor is exposed to thehigh-end real estate market in tier-one cities in China. Thissegment is challenging because it is affected by governmentpolicies to cool investment demand and housing prices.Nevertheless, in our view, the company's good competitiveposition and strong execution capability are likely to improveits financial performance despite the uncertain outlook forChina's real estate market. While Longfor's results for the first six months of thisyear met our expectation, its debt-to-capital ratio was higherthan we had anticipated, at 50%. The company's recent Hong Kongdollar 3 billion share placement will alleviate some of thepressure on its capital structure, in our opinion.