Guide to this report: Weak demand and increased competition have put pressure on the company's main business, and high-quality property assets and sufficient cash provide a margin of safety. Companies under the leadership of state-owned assets in Haidian District participated in the establishment of education investment companies. The state-owned enterprise reform is expected to promote the integration of education assets within the region. Investment points: Investment suggestions: The main business is under short-term pressure, and high-quality property assets and sufficient cash provide a margin of safety. State-owned enterprise reform is expected to promote the integration of education assets and improve profitability. Since Q4 of 2016, there has been a clear trend of recovery in middle and high-end consumption. The retail sales of the country's 50 key large retail enterprises have been growing for 6 consecutive months, with a year-on-year growth rate of 2.0% in the first quarter and +7.2 pct year-on-year. The main business is expected to accelerate to bottom. Considering that the Qinghe store will stop operating in early 2017, we have slightly lowered the 2017-2018 EPS forecast to 0.23 (-0.01) and 0.24 yuan (-0.03), giving 2019 EPS 0.28 yuan, maintaining the target price of 13.5 yuan, and maintaining an increase Hold a rating. Performance is under pressure in the short term, and high-quality assets provide sufficient margin of safety. The company achieved revenue/net profit of 53.80/112 million yuan in 2016, -6.62%/-32.51% year-on-year, and EPS: 0.21 yuan, which is basically in line with expectations. The main reason for the decline in profit was the decline in revenue and gross margin, while interest expenses increased, resulting in financial expenses +429% over the same period last year. In 2016, the company's gross margin decreased by 0.89pct, investment income increased by 82.73%, sales/finance expense ratios increased by 0.30/0.25pct respectively, and the final net interest rate fell by 0.81 pct. Book cash of 1.5 billion yuan+190,000 square meters of owned properties in Beijing's core business district plus 700 million yuan of financial assets available for sale, with a revaluation value of more than 12 billion yuan. As a listed company owned by Haidian state-owned assets, the company is expected to benefit from the integration of quality education resources in the region and achieve improved profitability. Haidian District is rich in quality education resources. As the capital platform with the smallest market capitalization and the highest shareholding ratio under the Haidian District State-owned Assets Administration Commission, the company is expected to be favoured by high-quality resources. The joint investment between the company and Haiguo Investment, Daoqin Investment, and Qianyuan Investment in 2016 is only a prelude to the establishment of Haijiao Investment. The subsequent integration of education resources in the region is worth looking forward to. Risk warning: The economic downturn inhibits consumption; the effect of integrating educational resources is lower than expected.