Incidents: The company released its three-quarter report for 2016, with operating income of 341 million yuan, a year-on-year decrease of 15.4%; net profit attributable to the parent company of 0.09 million yuan, an increase of 8.21% over the previous year; net profit after deducting non-payment of 0.06 billion yuan, an increase of 59% over the previous year; and basic earnings per share of 0.02 yuan. The company expects the performance growth range for the full year of 2016 to be -30%-20%, mainly due to the short-term impact of the Russian market and the decline in the company's overseas revenue; the company's financing scale has expanded compared to last year, and financial expenses are expected to increase. Performance stopped falling and hit bottom. The company's sales still fell 16% in the third quarter, but gross margin was 27.6%, a sharp increase of 8.4PCT over the same period last year. Starting in the second half of this year, mink raw material stocks already needed to be replenished. Prices at the auction in early September had already risen 30% lower, and raw material prices had come out of the bottom of W. It is expected that in the future, the company's gross margin will break out of the trough and gradually return to normal levels. Furthermore, the Russian exchange rate has also stabilized at the bottom since this year. Currently, the US dollar has depreciated 20% against the ruble compared to the beginning of the year, and the appreciation of the ruble is conducive to the company's future resumption of export business to Russia. The company's social e-commerce layout is progressing steadily. Considering the company's previous layout in the social e-commerce back-end, in August, it invested 5 million yuan in 10% of the shares in the future to lay out the front-end. Youshe Technology is currently planning to establish a joint venture with a leading domestic supply chain company to build a beauty supply chain, and this just so happens to provide strong back-end support to influencers represented by “Wang Yuepeng” in the future. From the point of view of the supply chain, beauty is better than clothing. Seasonality and inventory issues are not major, and the entry point is relatively simple. In the future, the company's weaknesses in the social e-commerce industry chain will be laid out, and its strengths will be further strengthened. The “increase in holdings” rating is given, and the target price for the next 3-6 months is 20.5 yuan. It is estimated that the company's EPS for 16-17 is 0.05, 0.06 yuan, corresponding to PE 347, 299 times. Currently, the company's additional reserve price is 14.31 yuan. We think this price is a good safety cushion. Considering that the company's performance has stopped declining and the social e-commerce layout is getting better, the medium to long term is promising. Risk warning. The company's social e-commerce layout is lower than expected, etc.