The investment suggests that revenue for 2015 was -4.9% to $6.295 billion, net profit changed from profit to loss, loss of $432 million. Non-recurring profit and loss had little impact, and the loss margin was higher than expected; 1Q16 revenue increased 9.6% to $1,922 million, and net profit increased 32.4% to 51.37 million yuan (net profit after deducting non-net profit increased by 46.5%). Upgraded to a neutral rating. Considering that the 2015 performance was lower than expected, the target price was lowered by 21% to 5 yuan. Reason 2015:4Q15 ushered in an inflection point in revenue and high costs. The company's revenue has continued to decline since 3Q12, and 4Q15 revenue reached an inflection point and increased by 2.1%. (1) By channel, the decline in revenue was mainly due to franchise revenue of -16.2%, but the wave of franchisees withdrawing has basically stopped; after channel adjustments, it is estimated that the current share of direct sales channels and revenue is 30% and 50%, respectively, direct sales revenue increased 7%, and e-commerce revenue increased by 123%; (2) by brand, MB/MC increased by 7%/26%, respectively. The gross margin was -1.2PCT to 44.0%, and the sales/management expense ratio of +2.1/1.7PCT to 34.9%/5.1% caused a loss in operating profit. Inventory increased 31% from the beginning of the year to $1.87 billion, inventory/accounts receivable turnover days increased by 20/8 days to 169 days and 32 days, and cash flow from operating activities - $185 million. 1Q16: Revenue continues to pick up, and expense rates are under control. Revenue continued to pick up and grow by 9.6%, gross margin increased by 1.2PCT to 43.9%, and the period expense ratio -1.5PCT to 35.8%. Development trends: 1) The company's market share continued to decline from 1% in 2011 to 0.4% in 2015 (overall clothing industry caliber), which is already lower than Semir in 2015. 2) The company expects a loss of 90 million to 0 million in January-June 2016. 3) The company plans to continue to promote the deep marketing integration of popular game IPs such as “World of Warcraft”, and at the same time use the official opening of Shanghai Disney Park to launch a variety of Disney fashion products, including men's and women's casual wear, home wear, children's clothing, accessories, and casual shoes. 4) The future focus is platformization, and there are expectations of brand integration. Profit forecasts and valuations take into account revenue recovery and cost rates under control. The 2016 e EPS was raised from loss to 0.03 yuan, and the 2017 e EPS was increased by 0.05 yuan. The 2016 e-EPS was corrected and increased by 75% in 2017. Despite 1H16's forecasted loss of 90 million to 0, we expect to reverse losses throughout the year. Currently, the market capitalization is only 35% of Semir, which has been upgraded to a neutral rating. Considering that the 15-year performance was lower than expected, the target price was lowered by 21% to 5 yuan, corresponding to a market value of 12.6 billion yuan (45% of Semir), and there is room for an 11% increase. The current stock price is 33% lower than the average repurchase price of major shareholders, and the fixed increase in the second half of the year is expected to pass. Risky terminal sales continued to decline; the expense ratio was even higher.