The company released its 2014 quarterly report on April 29. The first quarter of 2014 achieved operating income of 2,317 billion yuan, up 10.4% year on year, total profit of 190 million yuan, up 32.24% year on year, net profit of 137 million yuan, up 33.48% year on year; after deducting non-net profit of 136 million yuan, an increase of 36.78% year on year. Diluted earnings per share were $0.185, and operating cash flow per share was -0.06 yuan. Brief review and investment advice. The company achieved revenue of 2,317 billion yuan in the first quarter, an increase of 10.4% over the previous year. Among them, the newly opened Rugao Changjiang Wenfeng World, 2 supermarkets and 3 electronics specialty stores, and the newly opened Lianyungang Xugou Wenfeng World in January 2014 all contributed to epitaxial growth. The sharp increase in gross margin of 2.21 percentage points to 18.75% may be related to continued confirmation of real estate sales at Wenfeng City Plaza or Rugao Changjiang Xinwenfeng Complex. In addition, the sales tax rate and additional rate also increased by 0.63 percentage points. The sales management expense ratio was 7.94%, an increase of 0.07 percentage points over the previous year; financial expenses increased slightly by 590,000 yuan to 5.64 million yuan, and the cost ratio remained basically the same. Good revenue growth and a sharp improvement in gross margin drove net profit attributable to a sharp increase of 33.48% to 137 million yuan in the first quarter, far superior to the industry. Maintain profit forecasts. The company's diluted earnings per share in 2014-2016 are expected to be 0.57, 0.64, and 0.72 yuan, up 10.4%, 12.0% and 12.3% year-on-year. Among them, the main retail sector contributed 0.53 yuan, 0.58 and 0.66 yuan to EPS (increase of 2.7%, 10.1% and 13.7%), while real estate contributed 0.05, 0.06, and 0.06 yuan to EPS, respectively (there is great uncertainty about the time and ratio of real estate business confirmation). The company's current stock price of 6.94 yuan corresponds to the PE of its main retail business in 2014-2016, which is 13.1, 12.0, and 10.5 times the industry average (due to high uncertainty in the company's real estate business, ignoring its valuation impact); the company's current total market value of 5.1 billion yuan is 0.65 times the PS compared to the operating income of 7.8 billion yuan in 2014. Considering that the company has strong competitiveness in Jiangsu Province, especially in the Nantong region, and that it still has many reserve projects in the future and the projects still under negotiation, if successfully implemented, it will guarantee its epitaxial expansion and continued development of future performance, and maintain the company's target price of 8 yuan (corresponding to 15 times PE for the main retail business in 2014) and “gain” rating. Risk and uncertainty. (1) Uncertainty about the revenue and profit contribution of the real estate business; (2) the risk of an increase in the share of real estate business; (3) the impact of changes in the length of the cultivation period on short-term performance if large-scale epitaxial expansion is carried out using the urban complex model in the future.