Guide to this report: The company's performance in the first three quarters was in line with expectations. Strict control of costs and expenses led to the same increase in net profit, and a breakthrough in brand segmentation operations. Investment points: The three-quarter report is in line with expectations and maintains an increase in holdings rating. ① Strictly controlled costs and expenses in the first three quarters, and net profit increased year-on-year; ② The company adjusted its brand strategy, sought breakthroughs in multi-brand operations, and sought development in key regional layout; ③ terminated the acquisition of Tangcheng Little Chef, and the channel layout adjustment trend remained unchanged, maintaining the 2017/18 EPS of 0.50/0.53 yuan, corresponding target price of 27.17 yuan. Performance summary: 2017Q3 achieved revenue of 519 million yuan/ -1.15%; net profit of 56.87 million yuan/ -3.61%, corresponding to EPS of 0.18 yuan, revenue of 1,384 million yuan/ -1.14% in the first three quarters of 2017, net profit of 134 million yuan/ +3.09%, corresponding EPS of 0.43 yuan, performance in line with expectations. Strictly control costs and expenses to increase net profit, and seek breakthroughs in brand segmentation operations. ① Market and tax reform factors led to a decline in the company's revenue in the first three quarters; ② The company strictly controlled costs in the first three quarters and developed Internet payment methods with low fees to reduce financial expenses: financial expenses -61.12%, gross profit ratio 63.02% /-2pct, net profit ratio 10.55% /-0.75pct; ③ The company adjusted its brand strategy around “multi-brand development and key regional layout” and sought breakthroughs through brand segmentation and operation; Direct stores were adjusted into three categories: tourist stores, community stores, and shopping malls to explore new direct business models. The acquisition of Tangcheng Chef was terminated, and the trend of channel layout adjustment did not change. ① The company announced on March 24, 2017 that it intends to acquire Beijing Tangcheng Little Chef. On August 29, the announcement was terminated due to the failure of the two parties to complete the acquisition transaction within the specified time; ② The trend of the company's exploration of Internet channel development models has not changed, and product channels have been expanded by developing community markets and participating in the “Tmall New Year's Festival”. Risk warning: the impact of the slowdown in economic growth and policies on demand; food safety risks.