In the first quarter of 2015, the company's operating income was 2.24 billion yuan, down 3.3% from the same period last year. The net profit attributed to shareholders of listed companies was 119 million yuan, down 13.25% from the same period last year. The fully diluted earnings per share was 0.064 yuan. The performance was basically in line with our expectations. After deducting non-shareholders, the net profit attributed to listed companies was 113 million yuan, down 17.22% from the same period last year. We maintain the 2015-17 fully diluted earnings per share forecast of 0.25,0.26 and 0.27 yuan, raising the target price to 15.00 yuan, corresponding to 60 times 2015 price-to-earnings ratio and maintaining the holding rating.

Support the main points of the rating.

New stores erode profits: in the first quarter of 2015, the company achieved revenue of 2.24 billion yuan, down 3.3% from the same period last year. Net profit belonging to shareholders of listed companies was 119 million yuan, down 13.25% from the same period last year. Store closure led to a slight decline in revenue in the first quarter.

The gross profit margin increased by 0.96% over the same period last year, and the expense rate increased by 1.77% over the same period last year: in terms of gross profit margin, the company's comprehensive gross profit margin during the reporting period was 19.72%, an increase of 0.96% over the same period last year. In terms of the period expense rate, the company's expense rate during the reporting period increased by 1.77% year-on-year to 9.95%, of which the sales / management / financial expense rate changed by 0.79% 0.87 ash 0.12% to 5.43% 4.16% 0.36% respectively.

The main risks faced by ratings.

The training period of the new store is lower than expected.

Valuation.

We maintain the full diluted earnings per share forecast for 2015-17 at 0.250, 0.26 and 0.27 yuan, and the target price is raised from 6.64 yuan to 15.00 yuan, corresponding to 60 times 2015 price-to-earnings ratio.