The company released its 2013 semi-annual report on August 22. In the first half of 2013, we achieved operating income of 6.534 billion yuan, a year-on-year decrease of 0.84%, total profit of 19.9 million yuan, an increase of 141.30% over the previous year, attributable net profit of 10.14 million yuan, an increase of 117.56% year-on-year, and net profit of 26.58 million yuan, an increase of 137.20% year-on-year. Earnings per diluted share were 0.025 yuan, and operating cash flow per share was 0.54 yuan. The company expects to achieve the attributable net profit range [5 million yuan, 20 million yuan] from January to September 2013, which is equivalent to the EPS range of [0.013 yuan, 0.05 yuan]. Brief review and investment suggestions: The company's revenue fell by 0.84% in the first half of the year, mainly due to the decline in sales in the South China region, where operating pressure was high. The decline in the first and second quarters was 1.4% and 0.18%, respectively, and the decline in the second quarter narrowed; by strengthening gross margin control in various categories, the comprehensive gross margin for the first half of the year increased by 0.98 percentage points and 0.97 percentage points, respectively, in the first half of the year; the company's sales and management expenses fell 0.75 percentage points year-on-year in the first half of the year, mainly due to a decrease in labor costs, promotional expenses and electricity costs after strengthening period cost control ; Due to a decrease in interest income, financial income decreased by 6.53 million yuan. Due to effective gross margin management and period cost control, the company achieved operating profit of 41.08 million yuan in the first half of the year (same period last year - 63.1 million yuan), of which 7.59 million yuan increased year-on-year in the first quarter and 10.77 million yuan in the second quarter (a significant reversal of losses from -85.82 million yuan in the same period last year); in addition, the closing of the Pinghu store in the second quarter caused losses of 22.97 million yuan, and the company's final attributable net profit for the first half of the year was 10.14 million yuan (57.77 million yuan in the same period last year). Excluding the impact of net income and expenditure outside of operations, such as losses from closing stores, the company achieved profit in every single quarter in the first half of the year, and operations in the second quarter improved markedly compared to the same period last year. Looking ahead to the whole year, it is expected that the company's measures to strengthen gross margin and cost control will continue, and the quarterly year-on-year improvement trend is still expected to continue in the second half of the year; however, due to the increasingly intense competitive environment in the company's old region (South China region) and the new district has not yet formed a scale, it is difficult to expect a very obvious inflection point in overall performance. Furthermore, whether the company's 24 new stores in 2011 can break out of the cultivation period and achieve profit as soon as possible in 2013 is worthy of our continuous follow-up and attention. According to the company's latest business situation, we updated that its net profit for 2013-15 was 40.42 million yuan, 71.41 million yuan, and 95.43 million yuan, respectively, and the corresponding EPS was 0.10 yuan, 0.18 yuan, and 0.24 yuan, respectively. The company's current price of 896 yuan (market value of 3.6 billion yuan) is 0.26 times PS of sales revenue of about 13.6 billion yuan in 2013. Considering that the company's larger sales volume cannot be effectively converted into net profit, we believe this valuation is at a reasonable level; it is given a reasonable value range of 8.91-9.55 yuan (corresponding to 0.25-0.28 times PS in 2013) and maintains a “neutral” investment rating. Risk and uncertainty: cost rate impact due to the speed at which stores open; new store incubation periods that fall short of expectations; governance structure issues in the internal incentive system reform process.