601010.CH/ shares (held) announcement: on December 21, 2014, Wenfeng Group and Ms. Zheng Suzhen, a natural person, signed the share transfer Agreement of Wenfeng Great World chain Development Co., Ltd., transferring its 110 million unlimited tradable shares (accounting for 14.88% of the total share capital of the listed company) to Ms. Zheng Suzhen. On December 22nd, Wenfeng Group and Ms. Lu Yongmin, a natural person, signed the share transfer Agreement of Wenfeng Great World chain Development Co., Ltd., transferring its 110 million unlimited tradable shares (accounting for 14.88% of the total share capital of the listed company) to Ms. Lu Yongmin.

Comments:

Wenfeng Group transferred a total of 220 million shares of the company's share capital, accounting for 29.76% of the company's share capital, the proportion of major shareholders decreased to 45.72%, still the largest shareholder. Zheng Suzhen and Ms. Lu Yongmin tied to become the second largest shareholder of the company, with a shareholding ratio of 14.88%.

This time, Wenfeng Group transferred the company's equity, optimized the company's equity structure and enhanced the liquidity of the company's shares. Wenfeng Group received a total of 1.727 billion yuan, with a transfer price of 7.85 yuan per share, slightly lower than the closing price of 8.74 yuan per share before the company was suspended. Wenfeng Group plans to invest some of the funds raised in emerging industries, and promises that once the development project is profitable, Wenfeng Group promises to give priority to the project into the company to support the company's growth and development. The transformation or diversified development of the traditional retail industry is the trend of industry development. Major shareholders invest part of the funds collected into new industries and promise to give priority to injection into listed companies after the project is profitable, which will be conducive to the future development of listed companies. Higher company valuation is in line with the trend of industry development.

Valuation:

We maintain the company's earnings forecast of 0.505 yuan per share, 0.530 yuan and 0.567 yuan per share from 2014 to 2016 (we will not make a profit forecast for the time being due to the uncertainty of real estate settlement). We maintain a compound growth rate of 5% in the next three years based on 2013. we maintain the target price of 8.00 yuan per share, corresponding to the 2014 price-to-earnings ratio of 16 times, maintain the rating. In the future, with new projects in place and enterprise transformation, the possibility of upgrading the rating cannot be ruled out.