The 2015 results were in line with expectations. In 2015, revenue fell 6.6% and net loss was 497 million yuan, in line with the performance forecast. Same-store sales fell 6.5% in 2015 (down 5.5% in 2014), net closure of 408 stores. Profit before tax - 149 million yuan. However, the 42% increase in taxes reached 254 million yuan, mainly affected by losses in the operation of large integrated supermarkets, as deferred income tax assets fell by 123 million yuan. Development trends are expected to reverse losses in 2016. The main drivers include: 1) Lianhua Supermarkets and Bailian Group reached an agreement to acquire all of Lianhua Logistics's shares and 75% of Yiwu City Life's shares at the cost of cash (Yiwu City Life owns Yiwu Property, net profit of 199 million yuan in 2015) and all of Jimaisheng's shares (major supermarket chain operator in Shanghai, net profit is 1.81 million yuan). The deal is expected to contribute $181 million in net revenue in 2016. 2) Deferred income tax with a low base of $123 million in 2015 is a one-time item. 3) Supermarket operators are expected to benefit from the increase in CPI. Focus on operational reforms. Under the leadership of the new management, the company is implementing a series of reform measures, including: 1) using Yonghui supermarket's supply chain to improve fresh product operations to attract offline consumers; 2) store innovation to improve sales efficiency and consumer experience. The valuation and recommendations lowered the 2016/17 profit forecast by 7.3%/3.7% to 16 million yuan and 26 million yuan. The target price was lowered by 9.3% to HK$5.0, based on 0.2 times the 2016 market sales rate. Stay convinced to buy. Risk reforms fell short of expectations; consumption continued to be sluggish.