The results were generally in line with expectations. The company's 14H1 achieved operating income of 3,937 million yuan, a year-on-year decrease of 3.01%; realized net profit of 119 million yuan, up 7.48% year on year, net profit after deducting non-return to mother of 113 million, up 2.59% year on year; net cash flow from operating activities was -110 million, down 14.53% year on year. The semi-annual EPS was 0.35 yuan, and the weighted average ROE was 5.22%, the same as the same period last year. Revenue declined due to “sluggish consumption+three public restrictions+e-commerce diversion”. The company's 14H1 achieved revenue of 3,937 billion yuan, a year-on-year decrease of 3.01%. Consumption data continued to decline in the first half of the year, with sales of 100 retail companies falling 0.2% year on year, down 10.90 percentage points from the same period last year; at the same time, the government's anti-corruption trend remained unabated, and e-commerce diversion intensified. The triple effect compounded the company's revenue to decline slightly. By business, the company's 14H1 commercial operation achieved revenue of 3.776 billion yuan, down 3.18% year on year, gross margin of 15.69%, down -0.95% from the same period last year, and gross margin decreased slightly due to increased promotional activities such as Guangbai Night; commercial property leasing business achieved revenue of 76.01 million, up 9.91% year on year, and gross margin of 69.66%, down -4.96% from the same period last year. Strong cost control resulted in a slight reduction in the cost rate during the period. The company's expense ratio for the 14H1 period was 13.37%, down 0.97 percentage points from the same period last year. Among them, the sales expense ratio was 11.80%, a decrease of 0.93 percentage points from the same period last year, and the company's depreciation and utility expenses all fell by more than 20% in the first half of the year, achieving good cost control; the management expense ratio was 1.54%, an increase of 0.09 percentage points over the same period last year. On the one hand, managers' salaries increased sharply by 20.73% year on year, and on the other hand, depreciation, amortization and taxes under the management expenses category fell 15.60% and 20.23% year on year, respectively; the financial expenses ratio was 0.03%, down 0.17 percentage points from the same period last year. 14H1 achieved interest income of 14.28 million, relieving the pressure on the company's financial expenses. Small loan companies are doing well, and the return on investment helped the net interest rate rise slightly. 14H1 achieved investment income of 1.46 million yuan, an increase of about 1.4 million over the same period last year; realized net profit of 119 million yuan, an increase of 7.48% over the previous year. The net interest rate was 2.96%, an increase of 0.41 percentage points over the same period last year, and the semi-annual EPS was 0.35 yuan. Among them, Guangbai Microfinance Company was formally established in August '13, with a registered capital of 300 million yuan. The company invested 25%, and 14H1 used the equity method to account for Guangbai Microfinance to achieve revenue of 3.87 million yuan; at the same time, 14H1 purchased short-term wealth management products totaling 1.34 billion yuan, achieving an investment income of 10.75 million yuan. It is rich in extraterritorial assets, and is a direct target of national reform. According to media reports, the “Guangdong State-owned State-owned Enterprise Reform Opinions” have recently been reviewed by the provincial committee and provincial government, and it is expected that they will be officially released. The “Reform Opinions” will establish a supervisory list mechanism with the goal of clearly defining the boundaries of authority and responsibility between regulators and enterprises and releasing enterprise vitality, explore term incentives and long-term incentives closely linked to economic value added, and improve medium- to long-term incentive and restraint mechanisms. The company, formerly known as the Guangzhou Municipal Bureau of Commerce, now belongs to the Guangbai Group. The actual controller is the Guangzhou Municipal State-owned Assets Administration Commission. Its assets, such as storage and transportation, real estate, auto trade, auctions, and resorts, have not yet entered the listed company. There is a possibility of multi-faceted asset integration, which is the target of high-quality state-owned enterprise reform; in addition, as an established state-owned enterprise, the company's operating efficiency is at a low level within the industry, and there is plenty of room for improvement. In the future, the company's efficiency may be improved by introducing strategic investors and equity incentives. We expect that Guangbai will directly benefit from Guangzhou's state-owned enterprise reform, and it is worth paying attention to. Maintain profit forecasts and maintain increase in holdings. The company has expanded rapidly since 2009, and has a leading advantage in Guangdong Province. In 2014, the company tried traditional commercial channels and piloted the Liwan store to become a community lifestyle store; at the same time, in an environment where traditional commerce is declining, the company actively transformed O2O to promote the construction of the Guangbaihui platform and WeChat platform; the newly established Guangbai Small Loan Company will also continue to bring performance growth to the company. Furthermore, as a direct revenue target of Guangzhou's state-owned enterprise reform, the company may have room for future valuation improvements. We expect EPS to be 0.66, 0.66, and 0.67 yuan in 14-16, corresponding to the current share price PE of 14, 14, 14 times, and maintain an “gain” rating.