The company's 1-3Q2018 revenue decreased 0.09% year on year, and net profit to mother increased 12.52% year on October 27. On October 27, the company announced the 2018 three-quarter report. 1-3Q2018 achieved operating income of 9.646 billion yuan, a year-on-year decrease of 0.09%, and realized net profit to mother of 0.36 million yuan, equivalent to fully diluted EPS of 0.07 yuan, an increase of 12.52% year on year, achieving net profit without return to mother of 0.16 million yuan, an increase of 4.61% year on year. Looking at the single-quarter split, the company achieved revenue of 2,886 billion yuan in 3Q2018, a year-on-year decrease of 2.86%, which is greater than the 1.24% decline in 2Q2018. Net profit from 3Q2018 was -0.35 billion yuan compared to -0.18 billion yuan in the same period last year. The performance fell short of expectations. The comprehensive gross margin increased by 0.84 percentage points, and the expense ratio increased by 0.60 percentage points during the period. The main reason for the increase in net profit due to 1-3Q2018:1) The gross margin rose significantly. The comprehensive gross margin of the 1-3Q2018 company was 19.26%, up 0.84 percentage points from the same period last year. The main reason was that the company strengthened gross profit control. 2) There was a slight decrease in management and finance expense rates. In 1-3Q2018, the company's management/ finance expenses ratio was 2.14%/1.69%, respectively, down 0.12/0.19 percentage points from the same period last year. The leading retail company in Shandong Province, with a rich business format and a large number of stores, is a large-scale commercial retail enterprise based in Shandong that takes into account the development of surrounding regions outside the province, covering the three business formats of department stores, large integrated supermarkets, and shopping centers. As of the end of June 2018, the company had 129 stores, including 126 stores in 12 cities in Shandong Province, and 3 stores in Shijiazhuang, Baoding, and Zhangjiakou, Hebei. In addition, the company was entrusted with the management of 48 unlisted stores under Shandong Ginza Mall Co., Ltd. Due to the intense competition in the retail market in Shandong Province, many large retail enterprises such as Liqun and Jiajiayue have strong operating capabilities, making it difficult to increase the company's market share. Lowering profit forecasts and maintaining a “neutral” rating. We believe that the retail market in Shandong is fiercely competitive, it is difficult to increase the company's revenue growth rate significantly, and the effect of controlling costs and expenses is limited. We lowered our forecasts for the company's EPS for 2018-2020 to 0.10/0.10/0.10 (previously 0.14/0.14/0.14 yuan). The company's price-earnings ratio is still at a high level, maintaining a “neutral” rating. Risk warning: The retail industry in Shandong Province is fiercely competitive, and the risk of cross-regional expansion