The incident company announced the interim report. During the reporting period, it achieved revenue of RMB 680 million, an increase of 4.6% over the previous year, and profit attributable to the company's owners was RMB 31.83 million, a sharp decrease of 43.3% over the previous year. The company announced an interim dividend of 0.8 HK cents, and the dividend rate remained at 30%. Key investment points The decline in same-store sales is dragging down net profit margins. A number of factors have led to a marked decline in the company's performance. The weak macroeconomic situation and the continued effects of consumer restrictions caused per customer consumption to drop by more than 10%, while the bird flu outbreak in East China in April had a negative impact on passenger traffic. Furthermore, the company raised the remuneration of frontline restaurant employees in February this year, by an average increase of 12%. Overall, the company's same-store sales fell by 8.7% in the first half of this year. Affected by this, SG&A's expense ratio increased by 7.2 ppt to 65.9% compared to the same period last year, and the net profit margin fell by 4 ppt to 4.7%. “Minami Xiaoguan” is expected to become an engine for performance growth. In the first half of this year, the company opened 2 new “Nanxioguan” stores, one of which is located in Shanghai. This is the first time that the company has introduced the brand to mainland China. All “South Xiaoguan” stores reached a break-even point within a month. The estimated average payback period is 18 months, the average daily turnover rate exceeds 5 times, and the operating profit margin is as high as 18%. We believe that the asset-light “South Pavilion” model is better than the “Shanghai Xiaonanguo” with high investment. The company plans to open 7, 10, and 15 “South Pavilion” stores in 2013-2015, respectively, and its share of revenue is expected to continue to rise rapidly. The number of visitors to the same store bucked the trend and rebounded. We believe that one of the company's business highlights in the first half of the year was that same-store traffic rebounded 1.7%, while the same period last year fell 8.6%. The company successfully introduced more household consumers through various marketing methods, and both lobby traffic and sales recorded positive growth (private room traffic and sales both declined). We believe that the company will rely on product quality and brand depth to continuously increase the share of household consumption in order to offset the risk that business consumption and government consumption will continue to decline. Finance and valuation maintained the company's holdings growth rating. We maintain our previous earnings forecast and expect earnings per share for 2013-2015 to be RMB 0.06, 0.08 and $0.11, or 7.6, 9.8 and HK 13.5 cents. Corresponding to a price-earnings ratio of 20 times in 2013, the target price is HK$1.52. Risk suggests a sharp rise in raw material prices; food safety issues