Key investment events: The company disclosed its 2016 annual report. It achieved full-year operating income of 508 million yuan, a year-on-year increase of 23.71%, net profit of 126 million yuan, a year-on-year increase of 4.72%, and basic earnings per share of 1.48 yuan. Among them, Q4 achieved revenue of 186 million yuan, an increase of 35.51% over the previous year, and realized net profit of 42 million yuan, a decrease of 6.56% over the previous year. The company plans to distribute a cash dividend of 5 yuan (tax included) for every 10 shares. Review revenue growth is good. The company's annual revenue continued the high growth trend of the previous year, with Q4 revenue growing at an accelerated pace (+35.5%). Looking at the subregions, the South China and North China regions performed well, with revenue growth of 55.68% and 36.46% year-on-year. Gross margin declined due to changes in business structure, and sales expenses increased due to marketing and channel development. The company's annual gross margin was 49.45%, a limited decrease from the previous year (less than 2 percentage points). Due to the increase in the share of engineering business, the retail business profit level is basically stable. It is expected that in the future, with the expansion of the B-side business, the overall gross margin will continue to decline slightly. Influenced by the company's increased investment in marketing and the expansion of new channels such as e-commerce O2O and Internet home improvement, the annual sales expense ratio increased markedly, increasing 1.9 percentage points over the previous year, causing the period's expense rate to rise to 19.5% (+1.2pct). “Retail+Engineering” two-wheel drive, full of growth momentum. In addition to the accelerated promotion of online channels, the company's B-side project channel expansion has also achieved significant results. It recently signed a sales contract with Evergrande with a total price of 500 million yuan and participated in Evergrande's targeted capital increase. It is expected that this will not only significantly boost the company's performance in 17-19, but also help the company continue to develop real estate customers in the future. We believe that in-depth cooperation between high-quality building materials brands and real estate developers using the “industry+capital” model is expected to become the mainstream model, promoting an increase in the concentration of building materials brands, and the company's engineering channels are expected to expand rapidly in the future. Investment suggestion: The company is the first stock in the integrated ceiling industry. The big wave of “industry+capital” in the building materials industry has been successfully swept away, and the leading advantage is expected to expand further. In recent years, the company has worked diligently in multiple dimensions of brand, channel, product, and organizational structure to continuously improve its market competitiveness. We are optimistic that in the future, the company will achieve a qualitative leap forward in the whole housing market and engineering fields, and the company's performance will explode at an accelerated pace. The 2017-2019 EPS is expected to be 2.10, 3.14, and 3.93 yuan respectively, maintaining the “buy” rating. Risk warning: real estate fell beyond expectations, industry competition intensified