Performance was in line with expectations (annual net profit -163% vs. forecast net profit -159%). Baoshuo Co., Ltd. announced 16-year results: operating income of 1,115 billion yuan, up 219.98% year on year; net profit attributable to parent company - 142 million yuan, down 162.96% year on year, corresponding to earnings per share -0.22 yuan (weighted). Development trend companies completed the investment holding platform structure, and adjustments in the bond market in the fourth quarter dragged down overall performance. 1) The company completed the merger of Huacheng Securities in September, and transferred 7.36 billion dollars of supporting capital to the Huachuang account at the end of December. The company gradually transformed into an investment holding platform, with a two-wheel drive for securities and pipe profiles. In the future, through investment holding platforms, capital operation space will open up. 2) Huacheng Securities combined only 9-12M16 results, but due to year-end bond market adjustments, the fair value of fixed income assets pulled back (the company's 4Q fair value change losses reached 205 million), but throughout the year, the company's fixed income business line still recorded significant profits; 3) Traditional pipe profile business sales continued to be sluggish, and operations improved slightly: the revenue of pipe/profile products was -6.5%/+7.1% YOY to 192 million/121 million, and gross margin was +4.4/ 1.2/ 6.4%, respectively. The decline in the performance of Huacheng Securities was slower than that of its peers, and growth can be expected when capital is available. According to Huachuang Performance Express Company's net profit of -41% to 408 million in 2016, the decline was slower than the overall level of the industry of 49.6%; among them, asset management, investment banking, and stock pledge businesses all showed a growth trend: the scale of pooled asset management, which mainly focused on active management, was +243% to 4.77 billion yuan, stock pledge repurchases were +54% to 1.07 billion, and the bond underwriting scale was +419% to 18.1 billion yuan. The company's fixed capital increase plan is used for capital related business (two financing/pledged repurchase/self-management) and asset management business development. It will also promote the investment layout of public funds and PE in the medium to long term. Benefiting from the long-term development of Beijing-Tianjin-Hebei Province, Baoshuo's dual main business advantages have been highlighted. 1) The main pipe/profile business of Baoshuo Co., Ltd. is in Baoding, Hebei; 2) The company holds 40% of Baoshuo Real Estate. Among them, Baoshuo Real Estate and its subsidiaries Baoshuo Xinding and Baoshuo Jinhong have 10 plots of land in Baoding Development Zone close to Xiong'an. Entering the development period, it will benefit from the industry-driving effect of the new district. The main reason for the profit forecast is that the return on investment was lowered. We lowered our earnings per share forecasts for 2017 and 2018 by 20% and 10% from RMB 0.41 and RMB 0.45 to RMB 0.33 and RMB 0.4, respectively. Valuation and recommendations Currently, the company's stock price corresponds to 1.77x 17e P/B. The company has benefited from the long-term development of Beijing-Tianjin-Hebei Province, and there is strong investment sentiment in the market. We maintained the recommended rating, but raised the target price by 5.82% to RMB 18.73. Compatible with 2.1 x 17e P/B. Risk stocks and bonds declined sharply; regulatory uncertainty.