Key investment events: The company released its 2015 annual report. The company achieved annual revenue of 1,996 billion yuan, a year-on-year decrease of 3.22%; during the same period, the company achieved net profit attributable to the parent company of 253 million yuan, a year-on-year decrease of 1.89%. The performance was generally in line with expectations, and the decline in passenger traffic led to a decline in overall sales. Among them, the decline in sales of apparel products was relatively obvious. Gross profit margin: In 2015, the company's consolidated gross margin was 30.71%, up 0.36pct from 30.35% last year. Expense ratio: There was a slight increase in the company's three expense rates. Among them, the sales expense ratio increased by 0.05 pct, the management fee rate increased by 0.21 pct, the financial expense ratio decreased by 0.04 pct, and the total three fees increased by 0.25 pct. Net profit margin: The company's net profit margin belonging to the parent company's shareholders rose from 13.02% to 13.21%, up 0.19pct, making the decline in the company's net profit slower than the decline in revenue growth. Overall, the company's performance has maintained a relatively stable trend, in line with our previous expectations. The company continues to refine the department store business, and the E-MEC system is progressing steadily. 1) In the second half of 2015, the company will continue to make detailed adjustments to the four stores to dynamically meet the needs of major customers. Among them, Huijin Department Store will introduce trendy and exquisite popular catering brands; the Hongqiao store will expand women's clothing categories and support the sale of “star brands”; Shanghai 600 will step up product adjustments across floors; and Huilian Commercial Building actively participated in the Xujiahui Business District flyover renovation project. 2) With years of experience in single product management (SKU) and physical store operation, the company formed a R&D team with the School of Software of Shanghai Jiao Tong University to develop “ERP+APP” mobile e-commerce (E-MEC) with full integration of online and offline channels since 2014. Currently, the E-MEC software's first feature, “electronic invoicing,” has been launched in some Huijin department stores. In the future, the company will actively expand the scope of application of E-MEC software and promote the full implementation of online and offline simultaneous operation of Huijin Department Store with functions such as “single products, inventory, orders, promotions, payment, and data.” We maintain our view of the company: Disney concept+state-owned enterprise reform+high profit+high margin of safety+high dividend. Disney will open in 2016, which will bring rich traffic to the Shanghai business district, which will benefit Shanghai's commercial stocks. Xujiahui's assets are in a good position in the Shanghai business district, and will benefit from the opening of the Disney park after the opening of the park. Furthermore, as the only listed company under the Xuhui District State-owned Assets Administration Commission, Xujiahui will fully benefit from the reform of state-owned enterprises in Shanghai. As one of the top two business districts in Shanghai, the Nanjing Road business district is superior to the Xujiahui business district from the perspective of passenger traffic and sales of several single department stores, but due to the large number of department stores in the Nanjing Road business district, the bargaining power of each store over suppliers may be weaker than that of the Xujiahui business district, which has fewer core stores, from the perspective of profitability, the gross margin of the Xujiahui business district (Hong Kong Exchange and Pacific Department Stores is also about 22-24%). The gross margin of department stores is not inferior to that of the Nanjing Road business district. All four of the company's stores are owned by the parent company or subsidiary, with a total area of about 120,000 square meters. We conduct a sensitive analysis of the company's own property from the perspective of revaluation. Under the three conditions of conservatism, neutrality, and optimism, with reference to housing prices and store transfer prices in the Housing Search Network region, we gave our own properties a revaluation unit price of 50,000/square meter, 60,000/square meter, and 70,000/square meter respectively. In addition to the company's monetary capital, accounts receivable, and deducting liabilities and payables, the company's revaluation values were about 6.2 billion, 7.4 billion, and 8.6 billion, respectively. Judging from the company's historical dividend data, the company's annual dividend payment rate remains at about 60%, the company's fundamentals are stable, there are no major capital expenses in the short term, and there is plenty of cash flow. We expect the company to continue to maintain a high dividend payment rate in the future. Out of 93 listed companies in the CITIC Retail category, the company ranked second with a dividend rate of about 2.5%. In a situation where traditional retail prosperity continues to decline, the company's net profit and cash flow are relatively stable. The high dividend payment rate over the years shows that the company has a good corporate governance environment, maximizes shareholders' interests, and is worth allocating long-term investment by value investors when the company's margin of safety is high. The target price is 17.52 yuan, and the “increase in holdings” rating. In 2016-2018, the company's net profit attributable to the parent company's shareholders is estimated to be 260 million, 267 million, and 277 million yuan respectively, and diluted earnings per share of 0.63, 0.64, and 0.67 yuan respectively, up 2.84%, 2.70%, and 3.63% respectively. Based on the 2016/4/1 closing price, the corresponding PE for 2015-2017 is 20.9, 20.3, and 19.6 times. We valued the company based on the revaluation value and gave it a “buy” rating, giving it a “buy” rating of 28.0 XPE in '16 and a corresponding target price of 17.52 yuan.