Summary of 2017 annual report data: Annual revenue was 3.770 billion yuan, down 7.96% year on year; net profit from net profit of 109 million yuan, up 7.49% year on year; net profit after deducting non-return to mother was 92 million yuan, up 25.75% year on year; and EPS was 0.26 yuan. Looking at Q1-4 revenue and growth rates by quarter: 1,049 million, -13.33% yoy; 876 million, -7.86% yoy; 939 million, -6.78% yoy; 906 million, -2.34% yoy; the decline narrowed quarter by quarter. Net profit and growth rate: $40 million, +26.39% yoy; $26 million, +39.87% yoy; $29 million, +9.52% yoy; $0.14 billion, -43.74% yoy. At the same time, it was announced that a cash dividend of 2 yuan (tax included) will be distributed to all shareholders for every 10 shares. Revenue side analysis: Annual revenue was 3.77 billion yuan, down 7.96% year on year. According to category segmentation, food revenue was 1,962 billion (accounting for 54.33%), a year-on-year decrease of 12.16%, mainly due to the company's strategic cooperation with Hangzhou Alibaba Zetai to divest the cigarette business, offline sales were under pressure, and 34 inefficient stores were closed in 2016-17; fresh revenue was 911 million (accounting for 25.24%), an increase of 1.16% over the previous year; mainly due to the upgrading of the fresh shopping environment and the increase in base products, and implementation of measures such as 100% testing in terms of food safety won customer recognition; affected by online consumption, daily-use department stores and knitting Revenue was 646 million and 91 million yuan (total share 20.43%), respectively, down 8.73% and 14.54% year on year. Looking at each channel side, the company introduced Ali Empowerment at the end of 2016, entered the Taobao convenience platform and continued to build and improve online sales channels. During the reporting period, the company carried out third-party payment activities such as Alipay, enriched sales channels, expanded sales radius and user base, and achieved online sales revenue of 72 million yuan (2.01%), an increase of 15.19% over the previous year. Raise the profit forecast and maintain the “buy” rating. The company is a leading supermarket chain in Zhejiang Province. Based on important business districts and residential areas, the company is positioned as an affordable supermarket in the community. Alibaba was introduced strategically, with its strong e-commerce operation capabilities and emerging technologies such as cloud computing and mobile internet, and through resource sharing and complementary advantages, and comprehensive optimization and upgrading of existing physical stores, inventory/warehousing logistics systems, member management, etc., taking a solid step in strategic upgrading from a single offline to omni-channel integration. The employee stock ownership plan shows the company's confidence. One year after Ali settled in Sanjiang, the company's gross margin improved markedly. It is expected that with the gradual implementation of the integration between Ali and Sanjiang, there will be a further increase in sales scale and gross margin, so the profit forecast was raised. It is estimated that the company's EPS in 18-19 was raised from 0.26/0.28 to 0.32/0.36 yuan. The current stock price corresponding to PE is 62/55 times, maintaining the “buy” rating. Risk warning: The effect of improving gross margin did not meet expectations, the fixed increase process was delayed, etc.