Lao Fengxiang announced the quarterly annual report: In 2015, it achieved operating income of 35.7 billion yuan, an increase of 8.8% over the previous year, and achieved net profit attributable to shareholders of listed companies of 1.12 billion yuan, an increase of 18.9% over the previous year, and achieved earnings of 2.14 yuan per share. Total revenue for the first quarter was 11.4 billion yuan, down 5.7% year on year, and net profit attributable to shareholders of listed companies was 240 million yuan, down 17% year on year. Jewelry consumption is still weak, and Q1 hedging caused fair value and investment losses: the company's revenue was 35.7 billion yuan, up 8.8% year on year, of which jewelry revenue was 26 billion yuan (+2.7%); gold trading revenue was 4.3 billion yuan (+57%); handicraft sales revenue was 167 million yuan (-10%); jewelry business revenue rebounded steadily from last year, and gold trading grew strongly, contributing to a high revenue growth rate. Looking at the first quarter, the total growth rate of retail sales of gold and silver jewelry was still weak. The cumulative retail sales of gold and silver jewelry fell 3.9% year on year, reflecting the fact that downstream demand was still weak. Gold prices rose in Q1. The company experienced fair value changes losses and investment losses due to the hedging business. If the impact of hedging losses on performance is deducted, the profit growth rate is basically the same as revenue. Maintaining the “gain” rating: The company is still receiving high revenue and profit growth even though the growth rate of the jewelry consumer industry continues to be sluggish, which is a reflection of the company's brand value and comprehensive operating strength. We are optimistic about the long-term prospects of the jewelry consumer market, the company's brand value, and the contribution of the national marketing network to future profits. We predict that the company's EPS in 2016-2017 will be 2.31 yuan and 2.62 yuan respectively, maintaining the “gain” rating. Risk warning: 1. The recovery of the jewelry consumer industry is weak; 2. Market expansion results fall short of expectations