Key points of the report: Today, Shinur (002485) announced its 2013 annual report and 2014 quarterly report. The main results are as follows: In 2013, the company achieved operating income of 125,920,000 yuan, an increase of 6.76% over the same period last year, and realized net profit attributable to shareholders of listed companies of 71.3911 million yuan, a year-on-year increase of 48.95%, and earnings per share of 0.22 yuan. In the first quarter of 2014, the company achieved operating income of 235.996 million yuan, down 22.01% from the same period last year, and realized net profit attributable to shareholders of listed companies of 4.4849 million yuan, a year-on-year decrease of 78.59%, and earnings per share of 0.01 yuan. Incident review Revenue increased slightly, and the month-on-month decline continued to decline sharply in the first quarter, and there is still a need to wait for the stabilization period: in 2013, the company achieved a year-on-year increase in operating income of 6.76%, an improvement from 2.76% in the full year of 2012, but overall, due to poor terminal consumption, especially high inventory pressure on menswear companies, the revenue growth rate was not ideal. The company's clothing sales volume was 653,700 pieces, an increase of 8.38% over the previous year, and the average sales price declined slightly. Judging from the month-on-month situation in the first quarter, the company's revenue for the first quarter fell by 22.01% year on year. Judging from the month-on-month growth rate, the first quarter continued the downward trend in the fourth quarter of '13, and the decline further increased, so we still have to wait until the company's revenue stabilizes. Decrease in gross margin and increase in expenses: In 2013, factors such as company group customization business declined, company sales promotions increased, labor costs increased, and foreign trade order prices fell by 4.24 percentage points to 37.35%; the company's period expense ratio increased by 1.59 percentage points to 28.95%. Among them, sales expenses and management expenses increased 7.16% and 1.15% year on year, mainly due to the increase in the company's marketing network terminals, store depreciation and advertising expenses, etc., and the company's financial expenses increased by 417.93% year on year, mainly due to distribution Corporate bonds have led to increased interest expenses. Industry adjustments continue, waiting for terminal sales to pick up: We believe that adjustments in the menswear industry will still take time. Inventory backlog and slump in terminal consumption have made the company's order situation not ideal, and increased terminal promotions will affect the gross profit margin. As far as the company is concerned, the company actively constructs an ERP information system, keeps abreast of terminal sales information, reduces slow-selling inventory in stores, and optimizes supply chain management, which will help the company accelerate the end of the adjustment phase. Maintain the “Prudent Recommendation” rating: Our 2014-2015 performance forecast is 0.27 and 0.31 yuan, maintaining the “Prudent Recommendation” rating.