The company released a performance forecast. Net profit increased 6.65% year on year in 2016. On the evening of February 27, the company released a performance report: Total operating income in 2016 was 3.350 billion yuan, down 36.06% year on year, net profit was 65.38 million yuan, up 6.65% year on year, converted to EPS of 0.12 yuan, operating profit was 28.49 million yuan, down 65.24% year on year. The main reasons for the large decline in operating profit were: 1) Sales revenue did not meet expectations, and 2) asset impairment preparations for accounts receivable increased. 2016 was a slump in the industry. The company's operating income and operating profit declined markedly. Although the price of gold showed a strong trend in 2016, housing prices in Tier 1 and 2 cities rose too rapidly, suppressing rigid demand and spending on optional consumer goods, 2) the stock market disaster in the capital market curbed consumer spending, and 3) the growth rate of residents' disposable income slowed down, and gold and jewelry sales failed to grow at the same time as gold prices. Sales of optional consumer goods have picked up. It is optimistic that the performance of gold and jewelry in 2017 will be relatively good. The reason is: 1) The government's regulation of real estate prices has increased, the erosive effect of real estate on residents' consumption capacity has weakened, and residents' actual disposable capital is expected to increase. 2) Due to inflation and other reasons, more residents hope to preserve their assets by buying gold, and the gold and jewelry industry's gold bar sales are expected to increase. Adjust the profit forecast, adjust the target price to $12.50, and maintain the increase rating based on the current share capital of 528 million shares. We adjusted the company's 2016-2018 EPS forecast to 0.12/ 0.14/ 0.17 yuan respectively (previously considering the purchase of an additional house was 0.30/0.43/0.55 yuan), giving the company a target price of 12.5 yuan for the next six months and maintaining the increase in holdings rating. Risks suggest that the macroeconomic growth rate is lower than expected, and the growth rate of consumer demand is lower than expected.