Incident: Hangzhou Jiebai released its 2015 annual report. The company achieved operating income of 5.366 billion yuan, a year-on-year decrease of 11.37%, and net profit attributable to shareholders of the parent company of 226 million yuan, a year-on-year decrease of 5.93%. Comment: The company's property asset value creates a safe margin: Jiebai Shopping Plaza is located on the edge of Hangzhou's West Lake, with a construction area of nearly 130,000 square meters; Hangzhou Tower Shopping Mall is located in the Wulin business district of Hangzhou, with a total construction area of about 20,000 square meters; Jiebai Yiwu Store has a construction area of 30,000 square meters. The total commercial property area of the company is 360,000 square meters, with a market value of at least 10 billion yuan. It is also far higher than the company's current net assets of 2.7 billion yuan, and the company's debt ratio after excluding advance payments is only 21.6%, Therefore, it can be assumed that the current value of the company's assets provides a high margin of safety for the stock market value. The “joint distribution” model adopted by the company's main retail business has the characteristics of low risk/stable return: the joint venture model is a brand counter model where suppliers and shopping malls cooperate to sell. The company does not bear the loss of product price drops; after the product is sold, the company uses a certain deduction to carry forward gross profit through product purchase and sale price difference accounting. Furthermore, the company adjusts 10% to 20% of its cooperative brand counters every year according to sales revenue rankings to ensure that products are marketable. Under this model, the company neither needs to advance funds to buy products in advance, nor does it have to bear price drop losses, so it is a safe business model that can provide a stable cash flow for the company. Judging from the operating situation in 2015, 4.68 billion yuan of the company's total revenue of 5.36 billion yuan comes from the joint venture model, accounting for as much as 87%. In terms of profit model, the company also has a high margin of safety. Facing industry challenges, the company actively promoted business format innovation and developed experiential consumption: in 2015, China's total retail sales of social consumer goods amounted to 30,93.1 billion yuan; retail sales of the country's 100 key large retail enterprises fell 0.1% year on year, while the national online retail sales volume was 38,773 billion yuan, an increase of 33.3% over the previous year. The decline in total growth and e-commerce diversion due to the slowdown in economic growth are the main industry challenges facing shopping malls. To this end, the company introduced small cinemas, cafes, consumer medicine, high-end afternoon tea, music experiences, and concept restaurants to vigorously increase experiential consumption Using service-oriented consumer experiences to drive retail consumption in department stores. Judging from international experience and retail development trends, this experience-led retail model has great potential for success. The company's expectations for the transformation of cross-border medical services/sports services are clear: since last year, the company first cooperated with Dian Diagnosis to establish Yihe International Health Management Co., Ltd. to establish a private family health management service platform to give full play to the advantages of Hangzhou Jiebai's many high-net-worth customers and enter the medical service industry; later, it also cooperated with Hangzhou Sports Development Group to enter the sports service industry across borders, increasing the capital of Yuesheng Sports Brokerage Company, which is mainly involved in sports lottery sales and stadium operations. The partner Hangzhou Sports Development Group has various venues such as the Hangzhou Stadium, Sports Center, Fitness Center, and Daguan Swimming and Fitness Center. The direction chosen by the company is all the lifestyle service gap direction that society urgently needs. They have huge market space, and the partners selected are all powerful local units. As a result, the company's expectations for cross-border transformation are clear and feasible. Profit forecast and conclusion: Based on the joint retail service industry with a high margin of safety, the company makes full use of corporate goodwill and cash flow advantages and high-end customer resource advantages, and has a clear goal of expanding into the health care, sports and other industries. Through the development of lifestyle service projects, the future strategy to feed back the main retail business is feasible. Since the company reopens a shopping mall today and tomorrow, it is expected that the company can reverse the downward trend in revenue in the next 2 years. However, due to operating pressure in the retail industry as a whole, the company's revenue growth rate is still relatively average, so the company's EPS is expected to be around 0.32 yuan in 2016. Based on the active promotion of the company's transformation and cross-border strategy and the company's high asset value, a target price of 12 yuan was given, and a recommended rating was given for the first time.