The company released its 2014 quarterly report on April 26. The first quarter of 2014 achieved operating income of 559 million yuan, a year-on-year decrease of 3.64%; total profit of 102 million yuan, a year-on-year decrease of 1.12%; attributable net profit of 73.21 million yuan, a year-on-year decrease of 0.4%; after deducting non-net profit of 67.77 million yuan, a year-on-year decrease of 4.38%. Diluted earnings per share were 0.176 yuan, and operating cash flow per share was 0.05 yuan. The company also anticipates a year-on-year change in net profit from January to June 2014 [-10%, 10%], or 1.1-135 million yuan, equivalent to EPS of about 0.27-0.32 yuan. Brief review and investment advice. The company achieved revenue of 559 million yuan in the first quarter, a year-on-year decrease of 3.54%. This is reflected in weak endogenous growth in traditional department stores in core business districts of first-tier cities without epitaxial growth and business format transformation. The increase in gross margin of 0.33 percentage points to 29.98% may be related to reduced promotions or an increase in the share of other businesses. Although total sales and management expenses did not change much, the decline in revenue still caused the expense ratio to increase by 0.47 percentage points to 11.89%; financial revenue decreased by 120,000 yuan to 350,000 yuan, and the overall cost ratio increased by 0.48 percentage points. Due to the increase in revenue from wealth management products, investment income increased by 2.83 million yuan. The final net profit decreased slightly by 0.4% year on year, and after deducting non-net profit, it decreased by 4.38%. Maintain profit forecasts. The company's EPS is expected to be 0.59, 0.60 and 0.62 yuan respectively in 2014-2016, increasing by 0.41%, 1.23% and 2.91%, respectively. The company's current stock price of 10.18 yuan is 17.2, 17.0, and 16.5 times PE in 2014-2016, respectively; the current market value of 4.2 billion yuan corresponds to the 2014 sales revenue of 2.14 billion yuan, which is 2 times the dynamic PS, and PE and PS valuations are higher than the industry average. Risk and uncertainty: the fierce competitive environment in the department store industry in Shanghai; the impact of epitaxial expansion, etc.