The results are in line with expectations. Jiangling Motors announced its 2015 results, achieving annual revenue of 24.53 billion yuan, a year-on-year decrease of 4%; net profit belonging to the parent company was 2.22 billion yuan, an increase of 5.4% over the previous year. The company plans to distribute a dividend of 1.03 yuan per share, with a corresponding A/B dividend ratio of 3.9%/5.5%. Development trend Q4 gross margin and management expense ratio increased at the same time: Driven by the Shaker listing, the company's Q4 revenue increased 1.6% year on year to 7.56 billion yuan; Q4 net profit was 680 million yuan, up 18.2% year on year, mainly affected by increased gross margin, reduced asset impairment, and increased government subsidies. Due to product structure optimization, the company's gross margin Q4 increased by 2.3 ppt to 28.3% year on year, but due to the increase in R&D expenditure, the management expense ratio increased by 2.1 ppt to 12.7%, and the company's annual R&D expenditure reached 1.83 billion yuan, an increase of 18.1% year on year. Increased competition and economic decline are putting pressure on the cash flow business: Since last year, due to the downturn in the economy, the commercial vehicle downturn has also been compounded by increased competition in the European light passenger and high-end light truck business, the company's cash flow businesses such as light buses and light trucks have faced great pressure. Meanwhile, the performance of the Ford SUV Everest has also fallen short of market expectations since its launch in the fourth quarter of last year. It is expected that the main audience market is small and sales channels are limited. The company's sales volume remained weak in the first two months of this year. Overall wholesale sales volume was less than 30,000 units, a year-on-year decline of 33.2%, which is expected to put some pressure on the first quarter results. Three models were launched in 2016, and management costs are expected to remain high: 2016 is a major year for the company's products. It is expected that three models will be launched after March, the Quanshun MPV, Quanshun Light Bus, and Yusheng compact SUV. Affected by this, the company's R&D expenses are expected to remain high throughout the year; and due to the price competition pressure brought about by the overall downturn in the automobile market, we believe that further observation is needed to see if the three new cars and the Roadshaker can be successfully upgraded. Profit forecast We slightly lowered our 2016 net profit forecast to 2.61 billion yuan, a decrease of 5.5%, and added the 2017 profit forecast of 3.57 billion yuan. The corresponding 2016/17 EPS was 3.03/4.14 yuan, an increase of 17.5%/36.3% year-on-year. Valuation and Suggestions For the time being, we maintained Jiangling A/B's neutral/recommended ratings, and lowered the target price of A/B shares to RMB30/HK$30, respectively, by 6.3%. Venture company sales fell short of expectations.