2013 business review: Cost reduction helped reverse performance. The company achieved revenue of $12.716 billion in 2013, a year-on-year decrease of 1.53%; net profit attributable to shareholders of listed companies was $24 million, up 126.41% year on year. (1) Gross margin increased by 0.69pp to 20.99% year on year, indicating that the company has achieved results in category management and optimization of procurement channels, etc., and it is expected that gross margin will continue to increase; (2) the sales management expense ratio decreased by 0.44pp to 19.76%, as labor and operating expenses fell by 11.47% and 3.66%, respectively. It is expected that labor, rent, and operating expenses will still put pressure on profit growth; (3) the increase in gross margin and the decline in the cost ratio caused the company to turn a loss into a profit, and the net interest rate rose 0.88pp to 0.19%; (4) the share of food, fresh food, daily chemicals and department stores continued; the South China region's revenue fell sharply by 6.72%, and the northwest region increased by 7.56%; (5) The trend is expected to continue; (5) 10 new stores were opened and the Shenzhen Seaside Store closed; (6) The first limited shares were all lifted on January 14, 2014. 14-year business outlook: Focusing on cost control, the company will maintain the expansion strategy of community stores in Tier 1 and 2 cities and large stores in Tier 3 and 4 cities. It is expected that the company will add 10 new stores in 2014, a net increase of 8 stores, with an area growth rate of about 8%. Against the backdrop of oversupply and e-commerce diversion, it is expected that the company will face serious diversion pressure in the next few years. In particular, the pressure on same-store growth in Guangdong will continue. In 2014, the company focused on observing internal efficiency improvements centered on cost control. Labor and rent costs were the core factors affecting the recovery of the company's net interest rate. Profit forecasts and investment suggestions are affected by poor customer experience, serious homogenization, e-commerce diversion, oversupply, and rigid cost increases. The ability to attract customers and profitability in the first and second tier cities continues to decline; with the completion of a large number of commercial real estate in the next 2 years, the hypermarket business format in third and fourth tier cities is also about to end the blue ocean period of expansion, and there is limited room for future performance growth in the hypermarket format. We judge that after successfully reversing losses in 13 years, there will be a process of profit margin recovery in 14 years, and then it will enter a period of stable and slow development. The company's 14-16 EPS forecast was lowered to 0.08, 0.08, and 0.09 yuan, maintaining the “hold” rating. Risks suggest that same-store growth has declined sharply, and labor and rent pressure has increased.