Key investment matters: The company issued an announcement, and the board of directors of the company deliberated and passed the “Proposal on Termination of Operation of Cuiwei Department Store Qinghe Store”. The board of directors agreed that the company would soon terminate the operation of the Qinghe store ahead of schedule and authorize the chairman to decide on specific matters such as lease cancellation, contract signing, asset disposal, personnel placement, and schedule arrangements related to the termination of operations. Ping An's view: Early closure of the Qinghe store, which continues to lose money, aims to reduce losses and improve quality: Cuiwei Co., Ltd. has 8 stores (4 of which are self-owned properties and 4 are leased), with a total construction area of 434,200 square meters, including a leased area of 242,200 square meters and a floor area of 194,000 square meters of owned properties; the Qinghe store, which was terminated by this resolution, was the company's leased property, with a construction area of 31,600 square meters, accounting for 7.28% of the company's total. The lease period was March 16, 2010 to March 16, 2015. The store's operating revenue in 2015 was 2.22 One hundred million yuan, a loss of 28.65 million yuan. The company expects the total profit of Qinghe store to be 24 million yuan in 2016. The Qinghe store's operating conditions are poor, and it continues to lose money. The company's decision to terminate the Qinghe store's operations ahead of schedule is aimed at reducing operating losses and improving the quality of operations. The retail department store industry is under pressure, and the commercial operation strategy helped the Cuiwei department store business to bottom ahead of schedule. Due to the economic downturn and the impact of online consumption, offline physical retail, especially department stores, continued to decline at a rate of about 10% month-on-month. In the first half of 2016, commercial retail maintained a month-on-month downward trend; Cuiwei Co., Ltd. formulated a commercial operation strategy to build a “fashion+community” store system, adjust the rich functions of the business format, enhance the store consumer experience, and enhance the vitality of its own department store industry. The retail sales volume of 43 department stores in Beijing fell 10.01% year on year in the first half of 2016. The decline in the company's business scale was significantly lower than the Beijing average, and the company actively adjusted its traditional business operations. The strategy of closing stores that continue to lose money in a timely manner will help the company's department store business to bottom ahead of schedule. Backed by Haidian's state-owned capital, its own capital strength is strong, and its capital management strategy is worth looking forward to. At the beginning of 2016, the company proposed a capital management strategy. By improving the company's capital operation capabilities, exploring and deepening diversified investment and financing channels, strengthening the use and management of capital, carrying out diversified investments, actively seeking epitaxial development opportunities, and cultivating the company's future growth points; the company relies on Haidian state-owned capital, which is rich in educational resources and asset management experience, and has abundant cash flow in its own business format. As of the end of the 3rd quarter of 2016, the book capital capital of 1,355 billion yuan, mainly bank deposits, Haidian's state-owned capital support compounded the company's own financial strength, huge scope for subsequent diversified investment, and external development It's worth looking forward to. Valuation and investment recommendations: Maintaining the company's performance estimates, the company's 2016-2018 revenue is estimated to be 5.271 billion yuan, 5.484 billion yuan and 5.71 billion yuan respectively, net profit for the same period was 103 million yuan, 109 million yuan and 114 million yuan respectively. EPS for the same period was 0.2 yuan, 0.21 yuan and 0.22 yuan respectively, corresponding to the closing price of December 19. Dynamic PE was 53.6 times, 50.6 times and 48.6 times, PB was 1.89 times and 1.88 times, respectively Multiples and 1.86x. We believe that the company's asset quality is excellent. Its core assets are mainly monetary capital and properties held in the core area of Beijing, and the revaluation value of assets is high. At the same time, the company combines its own financial strength with the existing resources of Haidian state-owned assets, the controlling shareholder, to carry out huge capital operations and maintain its “recommended” rating for the company. Risk warning: The macroeconomy fell short of expectations; the decline in the traditional department store business exceeded expectations; and corporate outreach fell short of expectations.