Investment highlights: Event: The company announced its 2016 annual report. Net profit in 2016 turned a loss into profit, and the layout of the sports industry is becoming more and more mature. 1) Revenue increased by 50%, and net profit turned loss into profit. In 2016, the company achieved operating income of 3.8 billion yuan, an increase of 50.32% over the same period last year; realized net profit attributable to shareholders of listed companies of 25 million yuan, turning a loss into a profit; and diluted earnings of 0.03 yuan per share. In 2016, the company's profit distribution plan was: no cash dividends, no bonus shares, and a capital reserve fund to transfer 5 shares for every 10 shares to all shareholders. 2) The net interest rate was corrected, and the debt ratio decreased significantly. During the reporting period, the company's gross margin was 7.41%, down 4.01 percentage points from the same period last year; net profit margin was 1.45%, up 15.38 percentage points from the same period last year. At the end of the reporting period, the company's balance ratio was 45.88%, down 6.26 percentage points from the same period last year; the interest-bearing debt ratio was 28.59%, down 12.68 percentage points from the same period last year; and the balance ratio after excluding advance payments was 37.76%, down 7.50 percentage points from the same period last year. In 2016, sports transformed, and blossomed a bit more. In 2016, the company laid out and operated 10 stadiums, including 1 large complex (Rhine Stadium Beijing Daxing - Kunlun Fight World Fight Center) and 9 Lander Club fitness clubs. The promotion of Huangshan's first sports town project, the “International Outdoor Sports Base” in Huangshan, China, has achieved phased results and received 60 million yuan of financial support from the CDB Special Development Fund. Various events such as basketball, darts, outdoor sports, fitness adjustments, and civic sports were also held. In addition, the company also obtained exclusive agency rights for the video copyright of the international Class A tournament - World Curling Championship Tour CCT in China, and the right to distribute the video copyright for the Asian regional tournament. In 2017, “two core systems” were established to explore profit models. The company plans to focus on the three major sports fields of soccer, basketball, snow and ice, and build a “high-quality IP operation system”. A major asset restructuring has now been initiated to acquire Southampton Football Club, a Premier League (Premier League) team. The company also plans to focus on building a characteristic town for sports in the Rhine (outdoor sports service system), while actively building an urban public sports service platform with a six-level stadium system. In 2017, a contract was signed with the Tonglu County Government to spend 2 billion yuan to build an international soccer town as a sub-stadium for events related to the 2022 Hangzhou Asian Games and the main stadium of the Chinese Women's Soccer Super League. Investment advice: No ratings yet. Based on the current share capital calculation (that is, before the 2016 conversion increase), the company's earnings per share in 2017 and 2018 are estimated to be 0.03 yuan and 0.05 yuan, respectively. The company's suspension price on October 17, 2016 is 14.75 yuan per share, which corresponds to 491.67 times PE in 2016 and 295 times PE in 2017. The company is currently the company with the purest sports concept, continuous improvement of the business line layout, and the clearest strategic direction in the entire market. We are optimistic about the company's medium- to long-term development trends and the company's leading position in the sports industry. Due to uncertainty about the restructuring of the company's major assets, the rating is not yet available. Risk warning: There is a risk of uncertainty in the transformation of the company, and there is uncertainty about asset restructuring.