The performance was in line with expectations, and the net profit for the first three quarters of Q2016 fell 30.81% year on year. On the evening of October 21, the company announced the report for the third quarter of 2016:1-3Q2016 achieved operating income of 2,749 billion yuan, a year-on-year decrease of 38.28%; net profit attributable to the parent company was 51 million yuan, equivalent to EPS of 0.10 yuan, a year-on-year decrease of 30.81%; net profit after deducting non-return to the parent company was 119 million yuan, equivalent to EPS of 0.04 yuan. The performance was in line with our expectations. Looking at the quarterly breakdown, 3Q2016 achieved total operating income of 784 million yuan, a year-on-year decrease of 33.55%, a decline lower than the 45.32% decline in 2Q2016, and net profit attributable to the parent company of 210 million yuan, an increase of 23.44% year-on-year, an improvement over 22.88% year-on-year decline in 2Q2016. Gross margin increased 2.48 percentage points year on year, and period expense ratio increased 3.21 percentage points year on year. The company's comprehensive gross margin during the reporting period was 9.82%, an increase of 2.48 percentage points over the same period last year. The company's annual expense ratio during the reporting period was 8.53%, an increase of 3.21 percentage points over the same period of the previous year. Among them, the sales/management/finance expense ratio was 4.78%/1.55%/2.20%, respectively, a change of 1.72/ 0.55/ 0.94 percentage points over the same period of the previous year. Optional consumer goods will still be in trouble in the short term. Short-term gold and jewelry maintain a cautious view. Although gold prices have been trending strongly since the end of last year, gold and jewelry sales have failed to grow at the same time as gold prices have been trending since the end of last year, given the triple factors of 1) excessive rise in housing prices in Tier 1 and 2) the decline in consumption expenditure in the capital market stock market, and 3) the declining growth rate of residents' disposable income. We believe that given the current macroeconomic situation, the growth rate of gold and jewelry sales may narrow in the second half of the year, but it is still in a sluggish stage. We still maintain the cautious views of companies related to the gold and jewelry industry in the short term. The main reason is that this round of rising gold prices has not boosted the growth of gold and jewelry consumption. Maintaining the profit forecast, the target price of 15 yuan, and the increase in holdings rating, based on the total share capital of 759 million yuan after the completion of the acquisition of Haowu China, we maintain our forecast of the company's 2016-2018 EPS of 0.30/0.43/0.55 yuan (0.09/0.13/0.16 yuan before acquiring all of Haowu's shares), and gave the company a target price of 15 yuan for the next six months. We will adjust the ratings after the company resumes trading, and currently maintain 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.