Key points of the report describe the events of Ruihe Co., Ltd. published the company's 2015 annual report. During the reporting period, it achieved operating income of 1,820 billion yuan, a year-on-year increase of 19.58%, a gross profit margin of 14.30%, a year-on-year increase of 0.13%, and a net profit attributable to owners of the parent company of 65 million yuan, an increase of 18.28% over the previous year, and 0.54 yuan EPS. Among them, the fourth quarter achieved operating income of 583 million yuan, a year-on-year increase of 29.34%, a gross profit margin of 14.31%, a year-on-year increase of 0.46%, a year-on-year increase of 0.46%, net profit attributable to owners of the parent company of 512 million yuan, an increase of 18.26% year-on-year, an EPS of 0.10 yuan in the fourth quarter, and an EPS of 0.13 yuan in the third quarter. Incident review Both gross profit growth: Benefiting from the further strengthening of the main business in building decoration design and construction, and the steady development of the solar photovoltaic power generation business, the company achieved revenue of 1,820 billion yuan in 2015, an increase of 19.58% over the previous year. At the same time, the photovoltaic industry added new profit growth points to the company's single building decoration industry structure. Gross margin increased 0.13% year on year, and net profit attributable to parent company owners rose 18.28% year on year. In terms of expenses, the construction of an ERP system increased management expenses by 2.30% year over year, and the increase in interest on short-term loans led to a 36.57% increase in financial expenses over the same period last year. During the reporting period, the net cash flow from the company's operating activities was -81 million yuan, a year-on-year decrease of 344.67%, mainly due to an increase in the amount paid for purchased goods compared to the same period last year and a decrease in the amount received for products sold compared to the same period last year. The increase in management expenses and finance expenses in the fourth quarter led to a year-on-year increase in three expenses, while increased asset impairment losses weakened profits. Entering the field of photovoltaic installation and renovation of old buildings: The company cooperates with Xinyi to enter the photovoltaic business installation market. With the development of China's new energy industry and the rapid layout of distributed photovoltaics, the company's accumulated experience in photovoltaic electromechanical installation will bring the company a clear competitive advantage in the interior and exterior business of undertaking photovoltaic construction projects. The new office building independently constructed by the company has been put into use. The new office building is a model for the renovation of old buildings and a strong business card for the old renovation project of the enterprise. With the gradual increase in the size of the old renovation and redecoration market, the company's business expansion in this area is worth looking forward to in the future. Adjust the management structure to enhance the company's competitiveness: The company has increased investment in R&D of the ERP system and has now entered the operation promotion stage. The ERP system can help marketing management and project management achieve refined, standardized and standardized operation. At the same time, the company actively carried out R&D activities and created a BIM technical team to continuously enhance the company's core competitiveness. It is estimated that the company's EPS in 2016 and 2017 will be 0.60 yuan and 0.69 yuan respectively, and the corresponding PE will be 64 and 55 times, respectively, giving it a “buy” rating.