Key investment matters: The company released its 2016 annual report. In 2016, it achieved operating income of 3.406 billion yuan, a year-on-year decrease of 39.61%; realized net profit of 1,125 billion yuan, a year-on-year decrease of 42.99%; EPS of 0.40 yuan/share, a year-on-year decrease of 44.44%; and plans to distribute cash dividends of 1.1 yuan for every 10 shares. Ping An's view: Performance is in line with expectations and is superior to the industry average: 2016 achieved operating income of 3.406 billion yuan, a year-on-year decrease of 39.61%; net profit of 1,125 billion yuan was realized, a year-on-year decrease of 42.99%. The performance was basically within the expected range and above the industry average (the securities industry's revenue and net profit in 2016 decreased by 43.0% and 49.6%, respectively). The decline in overall performance was mainly due to a marked decline in the company's brokerage business and other income due to market factors. The business structure is more balanced, and the share of investment banks' own asset management business has increased: the share of brokerage business in the company's revenue structure declined markedly due to market transaction volume, from 48.2% to 27.5%; while the revenue share of self-operated business and investment banking business increased from 23.4% and 12.6% in 2015 to 29.4% and 25.4% in 2016, respectively, changing the situation where the company's traditional brokerage business accounted for too much revenue. At the same time, the asset management business developed rapidly, and its share of revenue increased from 0.9% to 3.1%. Investment banking business performance is outstanding, and regional advantages are obvious: the company's investment banking business revenue in 2016 was 860 million yuan, an increase of 21.18% over the previous year. The company carried out mergers and acquisitions financial advisory services for 4 listed companies and completed 3 IPOs; the fixed income business achieved operating income of 293 million yuan, an increase of 163.93% over the previous year, and issued 67 bonds. The issuance scale increased from 27.724 billion yuan at the end of 2015 to 72,417 billion yuan; the corporate bonds and corporate bonds underwritten by the company ranked first in Shaanxi, and recommended a total of 25 companies for listing in Shaanxi, establishing a good brand image, and obvious regional advantages. The allotment and refinancing plan has been implemented, and capital strength has been strengthened: in order to enhance capital strength and supplement operating capital, the company launched an allotment and refinancing plan in April 2016, which was approved by the Securities Regulatory Commission at the end of November. At present, the company has completed the non-public issuance of allotment shares, raising 4.852 billion yuan in capital. In this context, the company's profitability and risk resilience will continue to improve, while also expanding the company's business scale and optimizing its business structure. Investment suggestions: The company's overall performance in 2016 was superior to the market. At the same time, business restructuring continued to deepen, and the revenue structure was more balanced. It initially formed a diversified business development model, changing the situation of excessive reliance on traditional business, and steadily improving profitability. At the same time, allotment and refinancing have been completed, and capital strength has been strengthened, providing a foundation and guarantee for the future development of the company's business. Therefore, we continue to be optimistic about the company's future development and maintain the “recommended” investment rating. Risk warning: macroeconomic growth continues to slow, capital markets fluctuate sharply, policies are tightening and exceeding expectations, and business development falls short of expectations.