2018 First Quarter Report: Revenue was $1,115 million, up 6.32% year on year; net profit was $38 million, down 4.69% year on year; net profit from net profit of $38 million, down 2.6% year on year; and EPS was $0.09. Revenue side analysis: 2018Q1 revenue was $1,115 billion, up 6.32% year on year. The revenue growth rate has been corrected for the first time since 2013. During the reporting period, the company opened 6 new stores (2 supermarkets and 4 small business stores), closed 1 store with expired properties (3 stores closed in the same period last year), with a total net opening of 5 stores (3 in the same period last year), cooperated with Alibaba to build innovative supermarket stores. The establishment of a new “Yongjiang store” in '17 was favored by middle and senior consumers (company announcement), and 2 new innovative stores continued to promote the development of new retail formats (company announcement). The company's current adjustments to poorly run stores have basically come to an end, and sales figures have shown positive growth for the first time since 2013 (excluding a 0.5% increase in Q4 in 2015). Looking at the specific breakdown: Ningbo supermarket business revenue was 814 million yuan, down 0.04% year on year, and the decline narrowed (down 17.17% from the same period last year); supermarket business revenue outside Ningbo was 194 million, up 26.3% year on year, successfully reversing the negative growth trend, and the increase was significant; the total revenue of small business stores was 575 million, up 38.55% year on year, mainly because small business stores mainly serve the basic living needs of surrounding residents. At the same time, combined with online O2O integrated platforms to meet the multi-level needs of customers under consumption upgrades, it was recognized by consumers. Profit-side analysis: 2018Q1 comprehensive gross profit margin was 24.06%, up 1.41pct year on year; net profit margin was 3.44%, down 0.4 pct year on year. The increase in overall gross margin is mainly due to the company's focus on product reform, strengthening its own brand development and source procurement, introducing Ali's standardized management system to reduce product wear and tear, and boosting the gross profit of the supermarket business, which accounts for more than 94% of revenue. Among them, the gross profit of supermarket stores in Ningbo increased by 1.33 pct to 21.16%, and the gross profit of supermarket stores outside of Ningbo increased by 0.17 pct to 17.07%. The period fee rate was 18.82%, an increase of 1.7 pct over the previous year. Due to the increase in leasing costs and labor costs due to the opening of new stores, the sales expense ratio increased by 1.19 pct to 16.57% year on year; the management fee rate increased by 0.45 pct to 2.73% year on year; and the financial expenses ratio was -0.48%, up 0.06 pct year on year. Asset impairment losses in the current period increased by 153.98% year over year due to the increase in current expenses and the decline in inventory prices in the same period last year to 850,000, net profit fell 4.69% year on year to 38 million, and net interest rate decreased by 0.4 pct to 3.44% year on year. Maintain profit forecasts and maintain a “buy” rating. The company is deeply involved in the Zhejiang market, focusing on “supermarket+innovative store+small business format” store management, introducing Ali to accelerate the transformation and upgrading of its main business, promote O2O platform construction, and build a community affordable supermarket in the Internet era. The employee stock ownership plan shows the company's confidence. The company's EPS for 18-20 is estimated to be 0.32/0.36/0.41 yuan, respectively. The current stock price corresponding to PE is 59/52/46 times, maintaining the “buy” rating. Risk warning: The effect of improving gross margin did not meet expectations, the fixed increase process was delayed, etc.