In the first three quarters of 2013, the company achieved operating income of 901 million yuan, a year-on-year increase of 14.92%; operating profit of 53.531 million yuan, a year-on-year decrease of 41.19%; net profit attributable to owners of the parent company: 5.8864 million yuan, a year-on-year decrease of 47.52%; and basic earnings per share of 0.16 yuan. Operating income is growing steadily. The company is a leading suit enterprise in the northern market. More than 80% of its products are sold domestically, ranking first in the market share of suits in Shandong, Hebei, Henan, Shanxi and other places. By stepping up the construction of terminals and direct-run stores, the total number of stores as of June 30 reached 675 (including 164 direct-run stores), a net increase of 22 over the beginning of the year (of which there were a net increase of 16 direct-run stores). At the same time, through measures such as refined marketing management, improving the service system, and enhancing brand reputation, the company achieved a 14.92% year-on-year increase in operating income during the reporting period. The decline in gross margin and the increase in the period cost ratio have slowed down the growth rate of performance. During the reporting period, gross margin fell 2.58 percentage points to 38.64% year on year due to an increase in production costs, and the period's expense ratio increased 2.73 percentage points to 30.54% year on year. Operating profit and net profit attributable to owners of parent companies declined by 41.19% and 47.52%, respectively. Among them, the main reason for the rapid increase in the cost rate during the period is: first, the company's sales expenses for marketing network terminals, store leasing, depreciation, sales staff wages, and advertising increased by 20.37% year over year, causing the sales expenses rate to rise 1.05 percent to 23.23% year on year; second, at the beginning of the year, the company issued 400 million yuan corporate bonds with a face interest rate of 5.85%, which led to a sharp increase in financial expenses of 1445.90% year over year, and the financial expense ratio increased 2.22 percentage points to 2.40% year on year. Company point of view: The company's products are clearly positioned in the middle end and have high cost performance advantages in terms of fabric, workmanship and quality. Its target customers are white-collar workers in second-tier cities and the middle class in third-tier and fourth-tier cities. This enables the company not only to avoid direct competition with the first and second tier brands, but also to fully benefit from the current acceleration of the urbanization process in China, the county economy and the rise in consumption. As the economy recovers and new stores are opened and renovated, future performance is expected to pick up. Profit forecast: The company's 2013-2015 EPS is expected to be 0.43 yuan, 0.66 yuan, and 0.82 yuan respectively. Based on the latest closing price of 6.42 yuan per share, the corresponding dynamic price-earnings ratios are 15 times, 10 times, and 8 times, respectively, maintaining the company's investment rating as “neutral.” Risk warning: Direct store expansion falls short of expectations; risk of rising raw material and labor costs; risk of domestic demand recovery falling short of expectations.