Key investment points The revenue scale grew rapidly. The 16Q4 Rui series new product promotion showed significant revenue growth in a single quarter: 1) By business, the volume and price of basic modules rose sharply, and the volume of basic module business increased significantly: during the period, the company actively expanded the market through multi-channel expansion and coverage and new product promotion, etc., and the revenue scale grew rapidly. The basic module business achieved revenue of 265 million yuan, an increase of 36.5% year on year, mainly driven by sales growth (sales +33%, unit price +2.8%), and the basic module business volume growth was driven by Rui series new product promotion and engineering channels; the functional module business achieved revenue of 161 million yuan, up 10.1% year on year, and the price of a single set increased significantly (+8.2%); ACOLL's product promotion effect was obvious, achieving sales of 56,000 units, up 50% year on year, achieving revenue of 8.17 million yuan, up 95.5% year on year. 2) On a quarterly basis, the company achieved revenue of 66 million yuan, 149 million yuan, 107 million yuan and 186 million yuan respectively, up 8%, 36%, 4%, and 36% year-on-year. The company's 2016 Q4 revenue growth rate increased significantly compared to Q3, and was also significantly faster than the same period last year. We believe that in addition to the low base effect of the same period last year (8.6%), the company's revenue growth in the 2016 Q4 quarter was due more to sales of the new “Rui” series products launched by the company in October. The decline in gross margin level is mainly due to an increase in the share of basic modules with relatively low gross margin levels and a decrease in their own gross margin. 1) Looking at the product structure, the company achieved a gross profit margin of 49.32% during the period, down 1.95 percentage points from the previous year. Among them, the gross margin of the basic module business decreased 2.1 percentage points from the previous year, the gross margin of the functional module business increased slightly compared to the same period of the previous year, and the gross margin of the basic module, which was relatively low, while its share of revenue increased, leading to a decrease in overall gross margin; 2) Judging from changes in price and cost, the increase in cost was the main reason for the decline in gross margin. Affected by the rise in the prices of major raw materials such as aluminum and steel during the period, the unit sales price of basic modules and functional modules was adjusted to varying degrees, but it was lower than the cost increase. Advertising investment and e-commerce operating expenses have increased markedly, leading to an increase in cost rates. The company achieved a net interest rate of 24.89% in 2016, a decrease of 4.52 percentage points over the same period last year. The decline in net interest rate increased compared to gross margin, mainly due to an increase in the expense ratio. The company's expenses rate during the period was 19.52%, up 1.2 percentage points from the same period last year, mainly due to the increase in sales expenses; among them, 1) the sales expense ratio was 10.63%, an increase of 1.76 percentage points. Judging from the breakdown of sales expenses, the company increased its investment in brand promotion planning and expansion of e-commerce channels during the period. Advertising expenses and operating service fees increased significantly. The advertising fee was 13.44 million yuan, an increase of 44% over the same period in 15 years; the service fee was 8.12 million yuan, which was only 20,000 yuan in the same period in 15 years. 2) The management expense ratio was 10.61%, a decrease of 1 percentage point, mainly due to rapid revenue growth. Investment advice: The integrated ceiling industry is one of the fastest growing categories in home furnishing. The company is the industry leader and the only listed company. The effects of brand upgrading, management optimization, and channel adjustment over the past few years have gradually become apparent. Future multi-channel expansion and product category expansion will help the company once again embark on a path of rapid development. We expect the company's 2017-2019 EPS to be 1.99, 2.68, and 3.37 yuan, respectively, and the corresponding PE will be 32, 24, and 19 times, respectively. The company's current stock price is lower than the employee stock holding price (73.54 yuan) and fixed increase price (66.2 yuan), has a high margin of safety, and maintains a “buy” rating. Risk warning: The decline in real estate sales exceeded expectations, and new business development fell short of expectations