The company released the 2017 quarterly report, net profit increased by 12.96% year on year. The company released the 2017 quarterly report: 1Q2017 achieved operating income of 3.132 billion yuan, up 75.53% year on year; realized net profit of 199 million yuan, equivalent to overall dilution of EPS of 0.11 yuan, up 12.96% year on year; achieved net profit of 198 million yuan, up 229.45% year on year, exceeding expectations. The large changes in the company's revenue in the first quarter were mainly due to changes in the scope of the merger, adding the 1-2 month revenue of Rendong Department Store and Guanghua Department Store, and the 1-3 month revenue of Victoria Group. The consolidated gross margin increased by 0.53 percentage points, and the expenses ratio for the period increased by 4.09 percentage points. The consolidated gross margin of 1Q2017 companies was 25.88%, an increase of 0.53 percentage points over the previous year. The 1Q2017 company's period expense ratio was 14.88%, an increase of 4.09 percentage points over the same period last year. Among them, the sales/management/finance expense ratio was 9.83%/2.20%/2.85%, respectively, a year-on-year change of 1.24/ 1.13/ 1.72 percentage points. There was a significant increase in expenses during the period, mainly due to expenses resulting from the restructuring and the inclusion of period expenses for newly acquired companies during the reporting period. Asset integration raises cost levels, and future synergies show that in 2016, the company completed three major asset restructurings, and completed the acquisition of 100% of the shares of five companies in South China held by controlling shareholders and their affiliates, 100% of the shares of Chengdu Rendong Department Store and Guanghua Department Store, and 70% of Victoria Group's shares, resulting in a net increase of 29 stores. There are many sales expenses, intermediary expenses, and interest expenses related to the restructuring, which will cause a certain drag on the company's performance in the near future. At present, the company has gathered various business formats such as department stores, supermarkets, shopping centers, and Ole & Ole. After the new stores included in the restructuring have passed the integration and cultivation period, the synergistic effects of various business formats will gradually improve the company's profit level after the related expenses are reduced. Adjust the profit forecast, raise the target price for the next 6 months to 11.5 yuan, and maintain the increase in holdings rating. Due to uncertainty about the company's additional issuance plan due to the new regulations of the Securities Regulatory Commission, we adjusted our forecast for the company's 2017-2019 fully diluted EPS to 0.37/ 0.41/ 0.44 yuan (previously 0.30/ 0.31/ 0.33 yuan), raising the target price for the company for the next 6 months to 11.5 yuan, maintaining the increase rating. Risks suggest that consumer demand is growing at a slower rate than expected, and that the pace of integration of new stores falls short of expectations.