Key investment matters: Xujiahui released its 2014 quarterly report, 1Q achieved revenue of 560 million yuan, a year-on-year decrease of 3.6%; net profit attributable to shareholders of listed companies was 73 million yuan or EPS = 0.18 yuan, a year-on-year decrease of 0.4%, and realized net profit after deduction of 68 million yuan (non-recurring profit and loss was mainly entrusted wealth management income of 5.18 million and 1.86 million government subsidies), down 4.4% year on year, and net interest rate of 13.1%, in line with our expectations. The company expects the year-on-year increase in net profit in January-June to be (-10% ,10%). Ping An's view: Revenue growth has slowed, and there has been a slight improvement in gross margin due to weak terminal consumer demand and e-commerce diversion. The company's revenue fell 3.6% year on year, and the growth rate fell 4.6 percentage points from the same period last year. Growth is still being tested. Judging from the annual report data, the growth rate of the company's department stores has all slowed, and the revenue of department stores Xuhui Store/Hongqiao Store/Huilian Commercial Building increased by 1.7%/-1.6%/0.2% respectively. In the absence of effective external expansion, it is difficult for the company to break through on the revenue side. The company's gross margin continued to improve slightly, up 0.33 percentage points to 29.97% over the same period last year. The main reason is that its stores have upgraded their brands to varying degrees: the Xuhui store has rebranded some areas on the original first floor; the Hongqiao store has introduced popular catering brands with strong ability to attract customers on the first floor; the 600 supermarkets have set up a new collection of girls' clothing brands; and Huilian Commercial Building has optimized and adjusted major food categories. The company is a typical single department store company. It has lacked effective external expansion in recent years, and revenue growth mainly depends on same-store growth and internal brand upgrades. The pressure on the cost side has not abated. Operating leverage continues to be under pressure on the company's cost side, and there has been no improvement on the cost side. The sales plus management expenses ratio in the first quarter increased 0.47 percentage points over the same period last year to 11.89%, and has been rising for 9 consecutive quarters. Judging from the cash flow statement, labor costs increased 4.8% year over year. Due to weak growth on the revenue side, the pressure on the cost side was directly reflected in the deterioration of operating leverage in the first quarter, and the operating leverage fell to 0.1 (2.6/0.6/1.1/0.4 in the first four quarters, respectively), and the operating conditions of individual department stores continued to be under pressure. n downgraded the 14/15 EPS forecast by 0.57/0.57 yuan. The “neutral” rating company is located in the traditional Xuhui business district, and the store age structure is quite old. In an environment where consumption is sluggish, it is easy to fall into the dilemma of slow growth and rising costs. We believe that topics such as free trade zones are difficult to improve the company's profitability in the short term, and in the context of the recent slump in market sentiment, investors are advised to pay their profits in an appropriate manner. Considering the company's high dependence on major foreign exchange stores and lack of effective epitaxial expansion, the profit forecast for 14/15 was lowered to 0.57/0.57 yuan (previously 0.6/0.63). The current price corresponds to 14-year PE = 18X, maintaining a “neutral” rating! n Risk warning: economic recovery is falling short of expectations; labor and rent costs are rising rigidly; network zero