The company released its 2017 quarterly report. Net profit increased 60.86% year on year on the evening of April 21. On the evening of April 21, the company released the 2017 quarterly report: 1Q2017 achieved operating income of 646 million yuan, a year-on-year decrease of 4.33%; realized net profit of 16 million yuan, equivalent to EPS 0.06 yuan, an increase of 60.86%; and realized net profit of 15.97 million yuan, a year-on-year decrease of 4.82%, exceeding expectations. The company predicts that 1H2017 will achieve net profit of 33 million yuan to 43 million yuan, a year-on-year increase of 34.36% to 75.08%. The consolidated gross margin decreased by 0.17 percentage points, and the period expense ratio decreased by 2.12 percentage points. The company's consolidated gross margin in 1Q2017 was 20.37%, down 0.17 percentage points from the same period last year. The 1Q2017 company's expenses rate for the period was 16.03%, down 2.12 percentage points from the same period last year. Among them, the sales/management/finance expense ratio changed by 0.13/ -1.86/ -0.39 percentage points respectively. Among them, the large decline in the management expenses rate was mainly due to a year-on-year decrease in the number of people who handled paid layoffs during the reporting period, resulting in a year-on-year decline in dismissal benefits expenses. Property value constructs a margin of safety. Focus on state-owned enterprise reform companies currently have a small market capitalization of only about 3.4 billion yuan. The company's concentrated shareholding has not changed: the top four shareholders are still Shenyang ZTE Commercial Group Co., Ltd. (33.86%), Hangzhou Rushan Venture Capital Co., Ltd. (10.04%), Dashang Group Co., Ltd. (9.97%), and Dashang Investment Management Co., Ltd. (6.95%). Furthermore, the company's state-owned enterprise reform expectations still deserve investors' attention. The profit forecast was raised, the target price for the next 6 months was adjusted to 16 yuan, and the purchase rating was maintained. We raised our forecast for the company's fully diluted EPS in 2017-2019 to 0.44/ 0.47/ 0.50 yuan (previously 0.37/ 0.43/ 0.47 yuan), adjusted the target price for the next 6 months to 16 yuan, and maintained the buying rating. The risk suggests that the growth rate of consumer demand has not met expectations, and there is a risk that major shareholders will reduce their holdings in the future.