Core view The company's revenue for the first quarter of 2017 decreased by 3.48% year on year, net profit increased 37.76% year on year, and net profit after deduction increased 33.09% year on year, achieving basic earnings of 0.46 yuan per share. The performance growth rate increased significantly over 2016, mainly due to significant fee control effects. The company expects net profit changes of 10% to 45% in the first half of 2017. Gross profit margins have been rising steadily. The company's comprehensive gross margin increased by 0.84 pct year on year in the first quarter of '17, and the cost ratio fell sharply by 5.58 pct year on year during the period. Among them, the sales expense ratio decreased by 7.46 pct year on year, and the management expense ratio increased by 2.00 pct year on year. The quality of operations remains stable. In the first quarter of '17, the company's net cash flow from operating activities increased by 327.59% year on year, accounts receivable increased by 18.49% compared to the beginning of the year, asset impairment losses fell sharply by 75.60% year on year, and inventory decreased by 10.82% compared to the beginning of the year. As a strong sub-IPO, the company is expected to gain a broad space based on a multi-brand and multi-category layout. In the face of a sluggish market environment, the company's main business has maintained steady growth, leading channels and R&D advantages, and is a rare leading new stock in the industry segment. The company's multi-brand and multi-category strategy is in line with the characteristics of the underwear industry. The multi-brand layout in the underwear field has achieved complete coverage of all market segments, and testing the waters of multiple categories in the beauty sector will also lay a good foundation for the company's possible future expansion into the consumer goods sector. Financial forecasts and investment recommendations We maintain our previous forecast. We expect the company's earnings per share in 2017-2019 to be 0.93 yuan, 1.08 yuan, and 1.26 yuan, respectively. Refer to the comparable company's average valuation level in 2017, and give it a PE valuation of 35 times. The corresponding target price is 32.55 yuan, maintaining the company's “buy” rating. Risk indicates market demand risk, multi-brand and multi-category operation risk, inventory backlog risk, raw material price fluctuation risk