Commercial City (600306.CH/RMB 12.40, purchase) achieved revenue of 932 million yuan in the first three quarters of 2015, a year-on-year decrease of 17.77%. Net profit attributable to shareholders of listed companies was 100 million yuan, and fully diluted earnings per share were -0.57 yuan, which was basically in line with our expectations, and net profit attributable to shareholders of listed companies - 101 million yuan after deduction. In 2014, the company divested two non-core assets. Although it addresses the risk of short-term delisting, it cannot solve the business difficulties that the company will face in the long term. We believe that the future focus of the company is still on backbone resources. Given that its main business is scarce, we expect that in the next year, it will be necessary to improve its current difficult situation of continuing losses in its main business and maintain the company's 2015-17 earnings per share forecast of -0.9 yuan, -0.7, and -0.4 yuan, respectively, maintaining a target price of 20.50 yuan/share and maintaining a purchase rating. Key points supporting ratings During the reporting period, retail business revenue declined, net profit losses, and the main business faced tremendous pressure: in the first three quarters of 2015, the company achieved revenue of 932 million yuan, down 17.77% year on year, net profit attributable to shareholders of listed companies of 100 million yuan. By quarter, the company achieved revenue of 275 million yuan in a single quarter, down 11.81% year on year, and net profit loss of 28.66 million yuan. Although the decline in revenue growth in a single quarter in the 3rd quarter narrowed compared to the 1st and 2nd quarters, the retail business faced tremendous pressure. The balance ratio was high. Larger, the full-year results are expected to be a loss. The gross margin increased by 0.21 percentage points year on year, and the expense ratio decreased by 2.2 percentage points year on year: during the reporting period, the company's comprehensive gross margin increased 0.21 percentage points year on year to 17.15%, and the expense ratio decreased by 2.2 percentage points year on year to 27.89%. Among them, sales, management, and finance expenses changed by -0.63, 0.12, and -1.32 percentage points year on year to -0.3%, -0.27%, and -1.62%, respectively. The decrease in the expense ratio was mainly due to a decrease in insurance premiums, storage fees and other sales expenses during the reporting period. The main reason was the reduction in interest expenses to repay bank loans. Valuation: In 2014, the company divested two non-core assets. Although it addresses the risk of short-term delisting, it cannot solve the business difficulties that the company will face in the long term. We believe that the company's future focus is still on backbone resources. Given that its main business is scarce, we expect that in the coming year, we will have to use a backdoor to improve the current difficult situation where its main business continues to lose money, and maintain the company's 2015-17 earnings forecast of -0.9 yuan, -0.7, and -0.4 yuan, respectively, to maintain a target price of 20.50 yuan/share.