Events: The company's 2016 H1 operating income was 2.2 billion yuan, up 11.26% from the same period last year; net profit attributable to shareholders of listed companies was 227 million yuan, a decrease of 50.18% from the same period last year; net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss was 285 million yuan, up 28.58% year on year; basic earnings per share was 0.1 yuan/share. Opinion: The leisure household goods business continues to grow. During the reporting period, the company's operating income increased 11.26% year on year, net profit attributable to shareholders of listed companies decreased by 50% year on year, and net profit attributable to shareholders of listed companies after deductions increased 29% year on year. It can be seen that the company's operating income for the first half of the year and net profit attributable to shareholders of listed companies after deduction continued to grow. We believe it is mainly due to the steady operation of the leisure and household goods business. During the reporting period, the company's leisure and household products achieved revenue of 2.107 billion yuan, an increase of 10.18% over the previous year, accounting for 95.7% of revenue, a slight increase from 92.6% in 2015. Benefiting from the decline in prices of major raw materials and the depreciation of RMB, the gross margin of the company's main products has increased. The gross margin of the company's outdoor leisure furniture and supplies business during the reporting period was 31.43%, up 7.27% from the same period last year. In addition, the company's net profit attributable to shareholders of listed companies fell sharply by 50% in the first half of the year, mainly because the stock investment business's performance declined significantly compared to last year. Airline travel services expand the company's revenue channels. In August 2015, the company acquired and increased the capital of Beijing Liantuo Tianji, and now holds 60% of the shares in the target company. Beijing Liantuo's business area is mainly in the tourism industry. It provides distribution of tourism resource products and financial settlement services to enterprises in all links in the tourism industry chain. It mainly realizes its main business through the 51book platform, including the 51book ticket distribution platform, the 51book travel distribution platform, and the 51book airline holiday agency operation platform. The company's air ticket travel services achieved revenue of 34 million yuan during the reporting period. We believe that 51book has focused on air tickets and travel distribution services for the past 10 years. The target customers are travel agencies and individual customers. The profit model is to obtain revenue by collecting transaction commissions and providing service solutions. In the future, the company's “furniture+travel” business pattern will gradually take shape. Establish and improve the sales channel system. Due to the high demand for the company's products in overseas markets, the company has established stable sales channels overseas. As for the domestic market, the company is still in the early stages of market development. During the reporting period, Yongqiang achieved domestic revenue of 140 million yuan, accounting for 6.4% of operating income, a slight decrease from 10.4% in 2015. We believe that the increase in the number of domestic tourists and tourist attractions will expand demand for the company's outdoor leisure and household products, and the company has also begun to establish independent sales channels combined with online sales. Currently, the company's domestic business channels are mainly in two categories: online sales and offline self-operated stores. Online sales At present, the company has opened official flagship stores on Tmall and Jingdong, and the company and Qijia.com have jointly funded the joint venture Qijia Yongqiang. Zhejiang Yongqiang holds 70% of the shares, which is mainly responsible for the promotion and promotion of outdoor leisure furniture and related products online and offline in the domestic market. Conclusion: The company is a leading enterprise in the outdoor leisure furniture industry. It lays out the air ticket travel service industry through extended acquisitions, forming a “furniture+tourism” dual business pattern. We expect the company's revenue from 2016 to 2017 to be 3.88 billion yuan and 4.32 billion yuan respectively, EPS is 0.25 yuan and 0.3 yuan respectively, and corresponding PE is 30x and 25x respectively, maintaining the “highly recommended” investment rating for the company. Risk warning: 1. Risk of raw material price fluctuations; 2. Exchange rate risk.