The company released its 2014 semi-annual report on August 22. During the reporting period, operating income was 1.01 billion yuan, down 4.1% year on year; total profit was 174 million yuan, up 1.69% year on year; imputed net profit was 125 million yuan, up 1.96% year on year; net profit after deducting 115 million yuan, down 0.76% year on year. In the first half of 2014, the company's diluted earnings per share were 0.301 yuan, return on net assets was 7.07%; operating cash flow per share was 0.195 yuan. At the same time, the company also expects net profit attributable to January-September to change year-on-year [-10% ,10%], to be 1.54-189 million yuan, with a combined EPS of 0.37-0.48 yuan. Brief reviews and investment recommendations. The company achieved revenue of 1.01 billion yuan in the first half of the year, a year-on-year decrease of 4.1%, mainly due to the high base of gold and jewelry sales in the same period in 2013; among the major subsidiaries, except for the 2.55% increase in revenue of the 600 supermarket, Huijin Department Store, Hongqiao Store, and Huilian Commercial Building all fell 3-4%. The overall gross profit margin for the first half of the year was 30.22%, an increase of 0.92 percentage points over the previous year. Among them, commercial gross margin increased by 0.71 percentage points (also related to the decline in gold and jewelry sales with low gross margin) and other businesses increased by 0.25 percentage points. The total cost rate for sales management in the first half of the year increased by 0.53 percentage points, and the amount of expenses was basically the same; due to a reduction in handling fees, financial income of 530,000 yuan was achieved in the first half of the year (1H13 was 40,000 yuan in financial expenses), and the cost rate for the period increased by 0.48 percentage points to 13.09%. In addition, the purchase of wealth management products increased investment income by 4.24 million yuan, and net profit attributable in the first half of the year increased slightly by 1.96%, up 2.4 million yuan to 125 million yuan over the previous year; excluding the above investment income, net profit declined slightly in the first half of the year. Looking at the quarterly split, although revenue fell 4.67% in the second quarter, slightly larger than in the first quarter (-3.64%), due to a significant increase of 1.65 percentage points in gross margin, net profit ultimately increased 5.48%, improving nearly 6 percentage points over the previous month. Furthermore, in April, the company set up a wholly-owned subsidiary, Shanghai Free Trade Zone Xujiahui Mall Industrial Co., Ltd., in the Shanghai Free Trade Zone, with a registered capital of 10 million yuan. Currently, it is still in the trial operation stage. Maintain profit forecasts. The company's 2014-2016 EPS is expected to be 0.59, 0.60 and 0.62 yuan respectively, with increases of 0.41%, 1.23% and 2.91%, respectively. The company's current stock price of 10.82 yuan corresponds to 18.3, 18.1, and 17.6 times PE in 2014-2016; the current market value of 4.5 billion yuan, and the dynamic PS corresponding to revenue of 2.1 billion yuan in 2014 is 2 times, and both PE and PS valuations are higher than the industry average. Risk and uncertainty: the fierce competitive environment of the department store industry in Shanghai; the impact of epitaxial expansion, etc.