Key investment points: Revenue decreased by 39.99%, net profit to mother fell by 37.22%. The company released a semi-annual report. 16H1 achieved revenue of 1,964 billion yuan, a year-on-year decrease of 39.99%, net profit due to mother of 417.263 million yuan, a year-on-year decrease of 37.22%; net profit without deduction of 23.135 million yuan, a year-on-year decrease of 44.53%, and EPS was 0.08 yuan. The decline in the company's performance was mainly due to fluctuations in raw material prices and e-commerce squeezing profits from traditional channels. Gross margin increased slightly. Expenses increased during the period 16H1 Company's comprehensive gross margin of 9.39%, an increase of 2.14 percentage points over the previous year, mainly due to the company's increased cost control. During the reporting period, the cost rate for the period was 7.79%, an increase of 2.84 percentage points over the previous year. Among them, the sales expense ratio was 4.34%, an increase of 1.47 percentage points over the previous year, mainly due to increased marketing and promotion counter expenses; the management expense ratio was 1.52%, up 0.58 percentage points from the previous year; and the financial expenses ratio was 1.93%, an increase of 0.79 percentage points over the previous year, mainly due to a decrease in interest income. A strategic investment in Haowu China entered the R&D, production and sales of high-end precious metals and gemstone jewelry in the real estate e-commerce platform company's main business, and carried out chain operations for the “Ming” brand jewelry brand. On the owners' side, the company continued to optimize and improve self-operated store management and actively promoted multi-brand operations, developed and promoted young fashion consumer products represented by “fun” at the product line level; increased Internet, self-media, and social circle promotion efforts at the marketing level; and formally signed an image endorsement agreement with famous film and television star Liu Tao, committed to making Mingpai Jewelry a leading domestic high-quality fashion jewelry brand; took a stake in Haowu China to expand the space for outreach development. On June 27, the company's stock trading was suspended and planned for 75% of Haowu China's shares. Good House China is an O2O real estate crowdsale platform with a strong sense of innovation, and has good room for growth. It pioneered the “National Broker” model. Through innovative Internet technology products and C-terminal portals, it achieved de-centralization, accurate credit matching, and restructured the housing ecosystem. The online transaction volume exceeded 100 billion dollars in 2014. Recently, China's real estate market has been heating up rapidly. On the one hand, the company's investment in Haowu China will directly benefit from the recovery of the real estate market, effectively enhance the company's performance, and will not rule out further “Internet+” real estate brokerage business transformation in the future; on the other hand, Haowu China's excellent Internet mentality will have a strong synergy effect on the company's promotion of the jewelry Internet. Covered for the first time, it gave a “buy” rating of famous brand jewelry as a leading traditional jewelry company, in an effort to innovate the business model against the backdrop of the downturn in the traditional offline real economy. The strategic investment in Haowu China will, on the one hand, enter the field of Internet real estate intermediation and achieve a diversified business layout. On the other hand, it will integrate the company's valuable Internet team resources, accelerate the construction of the company's “Internet+” jewelry platform, and improve the company's long-term performance. In the future, the company may build a diversified investment ecosystem and business ecosystem around the “Internet +” strategy. We expect the company's 16-18 EPS to be 0.11 yuan, 0.13 yuan, and 0.16 yuan. The current stock price corresponding to PE is 119 times, 100 times, and 82 times, respectively, giving it a “buy” rating. Risk warning: Macroeconomic growth is declining