The decline in same-store sales narrowed in the fourth quarter of 2013. Daphne announced a -5.4% increase in core brand same-store sales in the fourth quarter of '13 (-18.1% in the third quarter and -13.7% in the second quarter). Same-store sales increased by -10.4% for the full year of '13, in line with our estimate of -10%. Daphne had an unprecedented net closure of 222 self-operated stores in the fourth quarter of '13, accounting for 4% of the total number of self-operated stores under core brands. Although improvements in same-store sales in the fourth quarter are likely to be distorted in small part by store closures, we believe the decline in sales is slowing down. Active inventory removal worsened gross margin, which is expected to rise slightly in 2014. The company announced that the year-on-year decline in gross margin for 2013 was low in single digits, while the full-year net profit margin is expected to be in low single digits. The main reasons are increased discounts, inventory provisions, and losses caused by store closures. Since these are all one-time expenses, we expect a slight increase in profit margins in 2014. As the industry becomes more competitive, the company's gross margin will remain under pressure for the foreseeable future. We lowered our basic earnings per share forecasts for 13 and 14 by 38.0% and 16.0%, respectively, and by 4.4% in 2015. The basic earnings per share forecast for 13-15 years was HK$0.215, HK$0.316, and HK$0.398. The company's rating was raised to “neutral”, and the target price was HK$3.98. The target price was lowered from HK$4.39 to HK$3.98, corresponding to 13.0 times and 10.0 times the price-earnings ratio in 2014 and 2015. The company's stock price outperformed the Hang Seng Index by 70% last year, and the negative factors have basically been reflected in the stock price. We raised the company's rating from “reduced holdings” to “neutral.”