Core view The company's revenue in 2016 increased 2.53% year on year, net profit decreased 15.71% year on year, net profit after deduction increased 8.41% year on year. The decline in profit from the clothing sector and investment business was the main reason why the company's annual profit growth rate fell short of revenue growth. In the fourth quarter, the company's revenue increased 102.65% year on year, net profit fell 66.14% year on year. In the first quarter of '17, due to a decrease in project revenue and investment income, the company's revenue and net profit fell 38.93% and 48.45%, respectively. In 2016, the company plans to distribute 5 yuan for every 10 shares and transfer 4 shares. The slump in retail sales and industrial upgrading in the apparel sector led to a marked decline in profits due to high short-term investment. In 2016, the company's apparel sector revenue increased 0.05% year on year, and net profit fell 15.97% year on year, mainly due to lower gross margin, decoration and depreciation, and increased expenses (relocation of production base). Among them, brand apparel business revenue increased 0.97% year on year, sales outlets decreased 91 compared to the beginning of the year, and online channels continued to grow rapidly, and annual sales revenue increased 93.74% year on year. In the first quarter of '17, the company's brand apparel business revenue increased 14.43% year on year, the combined net profit with OEM and other businesses increased 5.17% year on year, and the net decrease of 100 sales outlets. The rise in revenue and gross margin led to an increase in profits in the real estate sector in 2016. In 2016, the company's real estate sector revenue increased 4.68% year on year, net profit increased 47.27% year on year, and the company's real estate pre-sale area increased 7.31 pct year on year at the end of the year, and the amount decreased by 17.59% year on year. In the first quarter of '17, revenue and net profit of the real estate sector decreased by 51.16% and 63.44% year-on-year, respectively, due to cyclical factors in project development. In 2016, the company's investment business achieved investment income of 3,225 billion yuan, a year-on-year decrease of 6.18%. Among them, the change in Lianchuang's electronic accounting method and the sale of Changfeng Thermal Power's shares brought investment income of 1,369 million yuan, and disposal of marketable financial assets benefited 580 million yuan. However, due to the underlying reasons of land collection and storage revenue in the Textile City in the same period last year, the net profit from the investment business decreased by 39.24% year on year. The investment income and net profit of the investment business in the first quarter of '17 decreased by 37.97% and 38.58%, respectively. Continuing the “transformation of financial investment to industrial investment” idea, we expect that the company's future investment business will gradually focus on industries with promising long-term prospects, such as technology, new energy, health care, and tourism. The increase in holdings of controlling shareholders and financial and industrial capital reflects recognition of the company's value from the side. Controlling shareholders increased their holdings by a total of 40.48 million shares in March 2016, considering the average cash dividend price of 14.02 yuan/share; Yao Jianhua, Zhu Chongyun, and their co-actors listed in March; and the company's fixed increase in April 2016 was lifted, considering that the cost of cash dividends was 14.28 yuan/share (still inverted), all of which reflect the majority shareholders' confidence in the company's future growth and industrial capital's recognition of the company's value. The company's low valuation level and annual dividend rate of around 4% are expected to increase the attractiveness of the company's stock price. The industrial upgrading and innovation of the apparel business, the transformation and pension of the real estate business, and the “strategy+finance” strategy of the investment business will all provide space for the company's mid-term stock price. Financial forecasts and investment recommendations According to the annual report, we raised the company's expense ratio forecast for the next 3 years. We expect the company's earnings per share in 2017-2019 to be 1.57 yuan, 1.69 yuan and 1.79 yuan (the original forecast for 2017-2018 was 1.73 yuan and 1.81 yuan). Referring to the average valuation of comparable companies in the men's clothing and real estate sector, the company's clothing and real estate business was 27 times and 10 times PE in 17 years. The investment business only considered 10.9 billion yuan, with a total company valuation of 41.6 billion yuan, corresponding to the target target The price is 16.26 yuan, maintaining the company's “increased holdings” rating. Risk warning: The impact of financial market adjustments on the investment sector, clothing retail and real estate continued to fall short of expectations, etc.