The 2015 results slightly exceeded expectations, and continued to grow strongly in 2016. The company's revenue for 2015 was 5.25 billion yuan, an increase of 13%, which is basically in line with expectations. Net profit of 720 million yuan, an increase of 19%, exceeding our original 11.8% growth rate forecast, mainly due to a decrease in the cost ratio due to the stable management expenses of the company, a steady increase in sales expenses. Competition in the Anhui market remains intense, but Gujing Gongjiu has an absolute advantage at the price of 100 yuan. 1Q2016's annual revenue growth rate of 10.6% and net profit growth rate of 13.6% further shows the increase in profitability brought about by the increase in the company's gross margin. We expect a gradual increase in the company's net profit margin mainly due to a slight increase in gross margin and a decrease in management fee ratios. Development trend Gujing Gongjiu's vintage puree has continued to enjoy consumption upgrades in county and township markets throughout the province for 5 years. Gujing and Kouzijiao have significant oligopoly advantages, but they are also facing greater channel cost pressure, and there is limited room for a sharp decline in the cost rate in the short term. However, as the scale of Gujing Gongjiu is further increased at the price of 100 yuan, the price system will be stabilized, and the cost rate will gradually decrease in the future. Revenue growth in the province is highly sustainable. Mainstream brands such as Golden Seed Liquor, Yingjiagong Liquor, and Xuanjiu in Anhui are priced at 50 to 70 yuan, and there is a clear trend of further upgrading to vintage puree and mouth cellar. In the next 2 to 3 years, Gujing Gongjiu will still generate revenue growth of about 15% in the central China market. Company mergers and acquisitions are conducive to expanding markets outside the province, contributing greatly to revenue, opening up space for the company's nationalization, and promoting valuation increases. The profit forecast adjusted the company's 2016/2017 revenue forecast by -1.7%/-2.6% to $58.5/6.50 billion, and raised the net profit forecast by 9.7%/8.4% to $83/960 million yuan. The valuation and recommendations take into account the increase in valuation due to mergers and acquisitions, and give the company a 10% premium of 25X P/E in 2016, with a target price of 45.4 yuan, an increase of 18%, maintaining the “recommended” rating. Risk If the price of puree falls further this year, profits will hardly meet expectations.