Investment advice: The decline in revenue has narrowed, and net profit has maintained positive growth by closing stores to reduce the burden. As a state-owned listed company in Haidian District, there is plenty of room for integration of high-quality resources in the region. Considering that the company reduced its own burden and consumption continued to improve in the second half of the year, the 17-18 EPS forecast was slightly raised to 0.24 (+0.01) and 0.25 yuan (+0.01), maintained the EPS in '19 at 0.28 yuan, maintained the target price of 13.3 yuan, and maintained an increase in holdings rating. The decline in revenue has narrowed, and store closures have reduced burdens to ensure high net profit growth. In 2017, H1 achieved revenue of 2,529 billion yuan, -6.08%; net profit of 59.2569 million yuan, +30.13% year-on-year; and EPS of 0.113 yuan, in line with expectations. The decline on the revenue side was mainly due to the closure of the Qinghe store at the beginning of the year, which continued to lose money, but sales/management expenses after closing the store were -13.40%/17.35% compared to the same period last year, so the profit side achieved positive growth. By business, the revenue of the product sales/leasing business was -5.53%/-16.73% year-on-year, and the gross margin was +0.01/-2.34pct. The loss reduction in store closures caused the sales/management expense ratio to -1.01/-0.46pct year-on-year, the credit card fee reduction resulted in the financial expense rate -0.17pct, and the net interest rate was +0.66pct to 2.36%. Due to payment of store closing costs, the company's operating cash outflow was 1.07 million yuan, or -118% over the same period last year. It is a listed company directly under Haidian's state-owned assets, and there is plenty of room for integration of high-quality resources in the region. Haidian District is rich in quality education resources. As a listed company with the smallest market capitalization and the highest shareholding ratio under the Haidian District State Assets Administration Commission, the company is expected to be favoured by high-quality resources. Under the leadership of state-owned assets, the company has joined hands with Daoqin Investment and others to participate in the establishment of Haitian Education Investment to kick off the integration of the education industry. The subsequent integration of education resources within the region is worth looking forward to. Seven department stores in Beijing are located in the core business district. Among them, they own 190,000 square meters of property, with a revaluation value of more than 12 billion yuan, and sufficient safety margins.