The company achieved revenue of 3.613 billion yuan in 1Q2019, and net profit to mother increased 6.45% year on year. On April 26, the company announced the 2019 quarterly report. 1Q2019 achieved operating revenue of 3.613 billion yuan, a decrease of 5.33% year on year, while Q2018 revenue increased 7.25% year on year. Achieved net profit of 70 million yuan, which translates into fully diluted EPS of 0.13 yuan, an increase of 6.45% year on year, while net profit to mother decreased by 40.35% year on year in 4Q2018. Achieved net profit of 62 million yuan after deduction, an increase of 8.28% over the previous year. The results were generally in line with expectations. 1Q2019 gross margin increased by 1.42 percentage points, and the cost ratio increased by 1.27 percentage points. The main reason that the company achieved an increase in net profit to mother in 1Q2019 was that the increase in gross margin was greater than the period expense ratio. 1Q2019's consolidated gross margin was 19.13%, up 1.42 percentage points from the same period last year. The 1Q2019 company's expense ratio for the period was 15.40%, up 1.27 percentage points from the same period last year. Among them, the sales/management/ finance expense ratios were 11.32%/2.09%/1.98%, respectively, a change of 0.40/ 0.28/ 0.59 percentage points from the same period last year. The financial expenses of the 1Q2019 company were 71.6738 million yuan, an increase of 34.29% over the previous year. The main reason was that the company increased discounting loans on notes payable, which led to an increase in interest expenses. 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, covering the three business formats of department stores, large integrated supermarkets, and shopping centers. As of the end of March 2019, the company had 133 stores (including 26 stores in Linqu Huaxing Mall in Weifang), covering 12 cities in Shandong Province and 3 cities in Shijiazhuang, Baoding, and Zhangjiakou in Hebei. In addition, the company was entrusted with managing 49 unlisted stores under Shandong Ginza Mall Co., Ltd. Due to the intense competition in the retail market in Shandong Province, many large retail companies such as Liqun and Jiajiayue have strong operating capabilities, making it difficult for the company's market share to increase rapidly in the short term. Maintaining profit forecasts, the company that maintains the “increase in holdings” rating is the leading retail company in Shandong Province with a large number of stores. Since March 2019, China's optional consumption has shown a clear recovery trend. The company mainly focuses on the department store business and is expected to benefit quite a bit. We maintain our forecast for the company's EPS for 2019-2021, which is 0.10/0.10/0.11 yuan, respectively. Currently, the company's PB (2019E) is 1.0X, which is significantly lower than the average of the past three years (1.4X), and PS (2019E) is 0.22X, which is significantly lower than the average of the past three years (0.30X), maintaining an “gain” rating. Risk warning: The retail industry in Shandong Province is fiercely competitive, and the risk of cross-regional expansion