[Gong Le Si is deeply involved in domestic consumer products] Consumer products for young children have been around for many years, positioned as mid-high-end, and have steady performance. Under the trend of consumption upgrading, they actively adjust the product structure, promote channel transformation and upgrading, shape brand image, actively seek external cooperation, use overseas team industry resources, improve categories and brand layout, and create a one-stop maternal and child consumer service platform. The maternal and child industry is booming and the market space is broad. The company is a scarce target for maternal and child products. Investors are advised to pay active attention. Key investment points: The mother and child industry is booming under the two-child policy and consumption upgrade trend. According to the Frost & Sullivan report, China's infant apparel cotton and daily necessities market capacity will reach 375.5 billion yuan in 2016, with a 5-year CAGR of 22%. People born after 85 are the main consumers of maternal and child products. Their income level and level of education have increased significantly compared to the previous generation. The concept of childcare is advanced, health and comfort are the primary consideration, and the desire for high-end consumption is outstanding. Companies based on quality brands are the first to benefit in the process of increasing industry concentration. The company's annual performance is expected to remain stable, balance the product structure, adjust and upgrade channels, and shape brand IP to promote endogenous development. Increase the proportion of daily necessities and the proportion of underwear in cotton clothing, and improve the inventory structure. Strengthen channel control in first-tier cities, eliminate some inefficient department stores and cabinets, and maintain a net opening of around 100 stores every year, mainly direct-run community stores. Use animation companies to shape the Rabbi brand image (Rabbi Bear, Rabbi Family), create brand stories, and export IP products. Enrich product categories, build a brand hierarchy, and build a maternal and child industry ecosystem. Maternal and child products span a large range of categories and high sales linkage rates, making it difficult for ordinary merchants to meet consumers' one-stop shopping needs. In the future, the company will invest in and act as an agent for excellent domestic and foreign brands based on its own brands, covering eating, wearing, using, and playing with multiple categories of multi-brand maternal and child products. Currently, it has set up comprehensive stores without cross-border e-commerce to connect businesses. The company announced an investment of 225 million yuan to subscribe to the Maternal, Infant and Child Industry Fund share, with consumer goods as the main body, and actively layout fields such as maternal, infant and child health care, culture and education, etc., with huge room for imagination. Investment advice: The net profit for 2016-2018 is predicted to be 0.71/0.78/0.92 billion yuan, EPS is 0.35/0.38/0.46 yuan, and the target price is 39 yuan, giving it a “recommended” rating. Risk warning: Terminal sales are sluggish; epitaxial expansion falls short of expectations.