Core viewpoints

Both revenue and net profit declined. Hangzhou Jie achieved revenue of 1.36 billion in the first quarter, down 10.4% from the same period last year, due to the economic downturn, e-commerce squeeze and intensified market competition. The net profit belonging to the parent company was 60 million, down 25.8% from the same period last year. Mainly affected by the decline in revenue, operating expenses pressure, and other operating income fell sharply. Gross profit margin increased slightly over the same period last year, increasing by 0.42 percentage points to 22.6%, proving that the company's commodity structure continued to improve in the face of a weak economy. The company's operating expenses (including management and sales expenses) decreased by 3.5% compared with the same period last year, but the combined share of the two increased by 0.85% to 12% compared with the same period last year. Other operating income fell sharply by 122 per cent to-2.06 million, further exacerbating the decline in net profit, while the net interest rate attributable to the parent company fell 0.93 percentage points to 4.4 per cent compared with the same period in 2015.

Multi-modules go hand in hand and integrate with each other. Retail module: continue to serve high net worth customers, meet diversified consumer needs, and achieve differentiated operation. The 501st Plaza of Hangzhou Mansion, which opened in August this year, is expected to become a new source of revenue; at the same time, the holding of the G20 and the opening of Shanghai Walt Disney Company will also bring enough attention and rich tourists to Hangzhou, and the company will fully enjoy the spillover effects. In addition, management operating capacity, performance pressure, and annual salary incentives are all at a high level, and 16 years of revenue growth is expected. Health module: providing health management covering the whole life cycle for high net worth consumers in the form of medical mall, docking quality medical resources, building 24-hour family doctors, conducting differentiated operations, and establishing customer stickiness, which will start business in the second half of this year. Sports module: Yuesheng Sports is mainly engaged in sports lottery sales and venue operation, as a sports industry platform, it is expected to dock with more resources, and Hangzhou will host international and domestic large-scale events in the future. the company is expected to enjoy the dividend of the rapid expansion of the industry. Mutual integration: corporate layout of the big health and sports industry, the related services and products of the two industries can become commercial content to fill shopping malls, re-feed the traditional retail industry, and establish one-stop consumption.

The reform of state-owned enterprises is worth looking forward to. As the only listed company under the holding parent company Hangzhou Business Travel, Hangzhou Xiebai has obvious platform value and the expectation of further asset restructuring; and asset injection is the least resistance to the reform of state-owned enterprises and the main way to improve the asset securitization rate. After the acquisition of Hangzhou Mansion, its core management joined Hangzhou Xiebai. With the further deepening of the reform of state-owned enterprises, the internal synergy will be gradually strengthened in terms of management and operation. The parent company Hangzhou Business Travel has formed six sectors: commercial retail, catering services, hotels, tourism services, cultural creativity, and so on. The related products and services of these sectors are expected to become commercial content and fill shopping malls to meet diversified consumer needs and achieve differentiated operation.