The company released its 2013 three-quarter report on October 25. From January to September 2013, operating income was 9.63 billion yuan, down 0.83% year on year, total profit was 31.32 million yuan, up 139.54% year on year, and imputed net profit was 1577 million yuan, up 119.86% year on year. Among them, the third quarter achieved operating income of 3,096 billion yuan, a year-on-year decrease of 0.8%, total profit of 11.53 million yuan, a year-on-year increase of 136.86%, and attributable net profit of 5.63 million yuan, an increase of 126.01% over the previous year. In the first three quarters, the company achieved diluted earnings per share of 0.039 yuan (of which 0.014 yuan in the third quarter), return on net assets of 0.48%, and operating cash flow of 1.43 yuan per share. The company also announced that in 2013, the company's net profit attributable to shareholders of listed companies turned a loss of 20 to 40 million yuan compared to the same period last year, or 0.05-0.1 yuan per share. Brief reviews and investment recommendations. The company's operating income for January-September fell by 0.83% year on year, of which the first to third quarters fell by 1.4%, 0.18%, and 0.8% respectively, mainly due to the decline in sales in the South China region, where operating pressure is high; by strengthening the management and control of gross margin in various categories, the comprehensive gross margin for January to September increased 0.85 percentage points year on year, of which the third quarter increased 0.58 percentage points. The sales management expense ratio for the first three quarters decreased by 0.78 percentage points year-on-year, with the first half of the year and the third quarter falling by 0.75 and 0.84 percentage points respectively. The decline in the cost rate was mainly due to the reduction in labor costs, promotional expenses, and electricity costs after controlling expenses for the period; financial income decreased by 12.93 million yuan due to a decrease in interest income. In addition, net non-operating income and expenditure for the first three quarters decreased by 3.53 million yuan, mainly due to increased property and merchant compensation payments and non-current asset disposal losses due to store closures. In the end, in the first three quarters, the company achieved imputed net profit of 15.77 million yuan (-79.41 million yuan in the same period last year), an increase of 124.07% over the previous year. Excluding the impact of non-operating net income and expenses such as losses from store closures, non-net profit was 24.08 million yuan, an increase of 91.28% over the previous year. Maintain judgment on the company. Looking ahead to the whole year, it is expected that the company's measures to strengthen gross margin and cost control will continue, but due to the increasingly intense competitive environment in the company's old region (South China region) and the new district has not yet reached scale, it is difficult to expect a very obvious inflection point in overall performance. Furthermore, whether the company's 24 new stores in 2011 can break out of the cultivation period and achieve profit in 2013 and as soon as possible thereafter deserves our continuous follow-up and attention. Slightly adjust the profit forecast. The company's net profit for 2013-15 is estimated to be 36.38 million yuan, 68.55 million yuan, and 91.39 million yuan, respectively, and the corresponding EPS is 0.09 yuan, 0.17 yuan, and 0.23 yuan, respectively. The company's current price of 1,003 yuan (market value of 4 billion yuan) is 0.31 times PS of sales revenue of about 13 billion yuan in 2013. Considering that the company's larger sales volume cannot be effectively converted into net profit, we believe this valuation is at a reasonable level; it is given a target price of 9.78 yuan (corresponding to 0.3 times PS in 2013) and maintains a “neutral” investment rating. Risk and uncertainty: cost rate impact due to the speed at which stores open; new store incubation periods that fall short of expectations; governance structure issues in the internal incentive system reform process.