The commercial property leasing business is under pressure, and the real estate and financial services are performing well. The company achieved operating income of 990 million yuan in 2016, an increase of 17.94% over the previous year, and net profit attributable to the parent company of 96 million yuan, an increase of 6.01% over the previous year. On a quarterly basis, Q1 and Q2 achieved revenue of 490 million yuan (+19.75%) and 500 million (+16.23%) respectively, and net profit of 34 million yuan (-25.4%) and 62 million (+38.3%) respectively. By industry, the property leasing and management business continued to be under pressure, achieving revenue of 402 million yuan (+1.50%); the department store industry achieved revenue of 274 million (-0.93%); and the real estate industry and financial industry performed well, achieving revenue of 192 million (+39.51%) and 37 million (+271.45%), respectively. The ratio of sales management expenses has increased, and the ratio of financial expenses has tended to decline. The company's 2016 H1 sales management expense ratio increased by 3.02pp to 17.37% year on year, and the financial expense ratio decreased by 1.78pp to 6.61%. On a quarterly basis, the sales and management expense rates for Q1 and Q2 were 17.5% and 17.2% respectively, and the financial expense rates were 7.5% and 5.7% respectively. Expense control capabilities showed a certain trend of improvement. Improve the layout of commercial business formats and actively integrate the financial and entertainment business sectors. The company's 2016H1 continues to adhere to the development position of “family life, leisure and entertainment center operator”, focuses on transformation and upgrading, and actively creates a business model integrating business, finance and entertainment: 1) Business: Acquiring 80% of Dongjin Real Estate's shares, promoting the separation of “commerce and logistics” in the Guangzhou specialty market, investing in the “Chinese Food City” project, and helping the company's “O2O” strategy; 2) Finance: improving the “Haiyin Financial Service” service function to create the country's first “Cloud QuickPass User Experience Base”; 3) Entertainment: Grasp the Disney Coco distribution and distribution platform Converting debt to raise funds to support “Another Shanghai Haiyin “City” project development. Investment advice. The company's EPS for 16-18 is expected to be 0.094 yuan, 0.111 yuan, and 0.138 yuan respectively. Considering that the main business is under pressure to a certain extent, it will maintain a “cautious increase in holdings.” However, the company's transformation is still progressing actively, which deserves the continued attention of investors. Risk warning. The property leasing business continues to be under pressure, and the transformation effect is poor