Commercial revenue trends are declining, and expectations for transformation are increasing. The controlling shareholder of Guangbai Co., Ltd. is Guangbai Group (holding 54.2% of the shares), and the actual controller is the Guangzhou Municipal State-owned Assets Administration Commission. As a leading retail company in Guangdong Province, the company currently has 25 department stores. Due to the impact of e-commerce and other business formats and restrictions on official consumption, etc., the decline in revenue from traditional department stores has become a trend. In the first three quarters of 2014, the company achieved revenue of 5.440 billion yuan, a year-on-year decrease of 3.90%, and net profit to mother of 164 million yuan, an increase of 8.72% over the previous year. Under the trend of declining consumption and fierce competition, the company is willing to transform and upgrade in the future. Expand microfinance, financial management and O2O to transform your business. The company actively experimented with business transformation, set up microfinance companies to help supply chain finance, invest in wealth management products to contribute investment returns, and diversify its business while contributing to performance growth. At the same time, the company officially cooperated with Ali in October to launch the “Guangbaibao” electronic membership card, actively lay out the mobile payment field, carry out strategic exploration of the O2O model, use Guangbai's offline resources, combine the advantages of e-commerce online data to open up traffic, membership and payment links, achieve sales, membership and data integration, and gain an advantage in regional competition. Currently, the Guangbai O2O project has been launched at Beijing Road Store, Tianhe Zhongyi Store, Xinyicheng Store, and Gold and Jewelry Building, and may be rolled out to all stores in the future. The Group's overall listing expectations are leveraging the market to boost its overall strength. The predecessor of Guangbai Group, Guangzhou First Commercial Bureau, is a commercial group wholly owned by the Guangzhou State-owned Assets Administration Commission. In addition to Guangbai, the Group owns assets such as automobile trade, storage and transportation, real estate, auctions, resorts, etc., and the Group's strategy is to build a modern service aircraft carrier. In the context of state-owned enterprise reform, the Group has the possibility of listing outstanding assets as a whole, making full use of capital platforms to enhance its comprehensive strength. Guangzhou's national reform continues to advance, and Guangbai may directly benefit. After the Guangdong Provincial State-owned Assets Administration Commission clarified the state-owned enterprise reform plan in November, Guangzhou's state-owned assets reform plan may be implemented in the near future. Guangzhou Friendship, which is also a subsidiary of the Guangzhou State-owned Assets Administration Commission, announced on December 8 that it will inject 100% of Yuexiu Financial Holdings's shares through a fixed increase. After completion, Guangzhou Friendship will directly control high-quality financial assets under Yuexiu Financial Holdings, including Guangzhou Securities, Yuexiu Leasing, Guangzhou Guarantee, etc., which has become a major case in Guangzhou's state-owned enterprise reform. As reforms continue to advance, as the only listing platform for the Guangbai Group, Guangbai shares may benefit. Maintain profit forecasts and maintain increase in holdings. The company has expanded rapidly since 2009, and has a leading advantage in Guangdong Province. Revenue and profit growth are significantly superior to regional peers. At the same time, in an environment where traditional commerce is declining, the company is actively transforming O2O, promoting the construction of the Guangbaihui platform and WeChat platform, and building the “Guangbaibao” electronic membership card through cooperation with Ali, which helps the company expand its competitive advantage in the region. Furthermore, as a direct beneficiary 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 20, 20, 20 times, and maintain an “gain” rating.