Investment highlights: Revenue declined slightly, and losses were recorded in the first quarter. The company achieved operating income of 119 million yuan in Q1 of 2015, a year-on-year decrease of 7.05%; net loss of 3,0396 million yuan, a sharp decrease of 155.28% year-on-year, mainly because it received demolition compensation and asset disposal expenses for the demolition of the Xi'an Roast Duck Shop East Street in the same period last year, net loss of 8.757 million yuan after deducting non-recurring profit and loss, a year-on-year increase of 52.91%; EPS was -0.0061 yuan/share, a decrease of 127.73%; weighted average return on net assets -0.44%, down 1.22pp; net assets attributable to listed company shareholders 689 million yuan, a year-on-year decrease of 0.44%. Revenue and gross margin declined during the transformation and upgrading period, and the accelerated expansion of offline channels led to an increase in the cost ratio. 1. In order to adapt to the new normal of the catering industry, the company actively sought transformation and upgrading, and comprehensively promoted small specialty stores and popular consumer varieties. Revenue and gross margin during the transition period were affected to a certain extent. In 2015, Q1's revenue was 119 million yuan, a year-on-year decrease of 7.05%; gross profit margin was 36.32%, a decrease of 1.52 pp from the end of 2014. 2. The expansion of offline sales channels has accelerated, and the increase in sales and management expenses has led to an increase in the cost rate during the period. In 2015, in Q1, the company continued to accelerate the construction of offline sales channels, and sales and management expenses continued to rise. At the end of 2014, the sales and management expense rates were 29.07% and 6.32%, respectively, and increased to 32.12% and 6.45% in Q1 in 2015, leading to an overall increase of 2.86pp in the period. Epitaxial expansion continues to advance. The company has announced that it will acquire the Beijing restaurant chain “Jiahe Yipin” through a private offering. In the future, management will make full use of the capital market as a platform to vigorously promote capital operations, accelerate epitaxial expansion, speed up the pace of mergers and acquisitions, and achieve the company's sustainable leapfrog development through mergers and acquisitions. Drive the company's superior products and food industry out of Shaanxi. Investment advice: Considering the comprehensive impact of the additional distribution and acquisition of “Jiahe Yipin”, we predict that the basic EPS for Xi'an Food 15/16/17 will be 0.05/0.07/0.09 yuan. Performance promises and related compensation clauses in the acquisition agreement are more stringent, and the reward clauses are more generous, reflecting better performance expectations. The restaurant industry has entered a new normal due to the slowdown in the country's macroeconomic growth rate and the continuing effects of a series of measures such as the Eight Rules and the implementation of savings. Changes in the market environment have had a certain impact on the company's main business. If profits from disposal of non-current assets are excluded, the profit side was already in a state of loss in 2014. The company has adopted an active strategy to deal with this. On the one hand, we are actively promoting the transformation and adjustment of “popularization” of business, and on the other hand, we are seeking external expansion and integration of market resources, and the strategic direction is precise. At the same time, the company is in a strategic region along the Belt and Road, and at the same time falls under the target of state-owned enterprise reform. It is recommended that active attention be paid to the extended M&A process. Give an increase in holdings rating. Risk warning: M&A target performance falls short of expectations; M&A process falls short of expectations; food safety issues