Core view: The company announced its 2016 results report annual revenue of 2,049 billion yuan, up 8.54% year on year, and net profit of 183 million yuan, up 10.77% year on year. Among them, single-quarter revenue for the fourth quarter increased 11.38% year on year, and net profit increased 988.73%, which is further accelerated from the previous three quarters. The sharp increase in net profit in the fourth quarter was mainly due to the negative base for the same period last year, the overall economic downturn in 2015, and revenue growth in the fourth quarter was lower than expected. At the same time, e-commerce and distribution grew faster in 2015, but the gross margin of e-commerce and distribution was relatively low, so overall gross margin decreased slightly. On the other hand, the company strengthened effective cost control in 2016. The company's leading advantage is further highlighted. Judging from the situation of high-end domestic underwear companies that have announced results, the company's performance is steady and superior to its peers. We think it mainly benefits from the company's always being very cautious in channel expansion and paying more attention to improving single-store efficiency. In addition, the company's e-commerce business accounts for a higher share. In 2016, Double Eleven's main brand, Manniffen, ranked second in the trading index, while the other four high-end underwear brands only Dianne Fen entered 10th place. The company will directly benefit from consumption upgrades. China's high-end underwear market share is far lower than the market share of high-end underwear in mature economies, and there is huge room for development. Foreign experience shows that along with the increase in GDP per capita, the underwear market will experience a significant increase in consumption, and the market share of high-end underwear will increase significantly. We believe that the Chinese underwear market will likely meet an inflection point of consumption escalation within a few years. EPS in 2016-18 is expected to be 0.84 yuan, 0.91 yuan, and 1.04 yuan. The current stock price is 36 times the 2017 P/E. The valuation level is at the historical average. Based on online sales, the cosmetics business may exceed expectations and maintain the company's purchase rating. Maintain the company's “buy” rating. Risk indicates the risk of being greatly affected by the slowdown in economic growth; the risk of failure to adapt to changes in consumer demand;