The amount of orders in hand is stable, and there is no room for revenue to continue to decline. The company signed a new order of 1.01 billion yuan in Q1 in '17, accounting for 36.11% of the revenue in 2016. Of these, the public decoration business added 1,039 million new orders; the residential decoration business and design business added orders of 0.47/15 million, respectively. Currently, the company has orders of 3.229 billion yuan, accounting for 112.24% of 2016 revenue. The amount of on-hand orders is still at a stable level, so the company's revenue is expected to increase. The company's revenue sometimes declined. The gross margin was basically stable. The company achieved revenue of 2,877 billion yuan in 2016, a year-on-year decrease of 4.30%. Among them, the company's traditional main business, building decoration business, had revenue of 2.595 billion yuan, down 4.30% year on year; vocational education business was 277 million, surging 132.78% year on year, mainly due to the combined factors of the company's new mergers and acquisitions of vocational education companies. The company's Q1 revenue in '17 was $730 million, down 23.95% year-on-year. After excluding the “business change to growth” factor, we calculated that the gross margin for 2016 was 23.37%, an increase of 0.36 percentage points over 2015. It may be caused by the higher gross margin of the vocational education sector and the increase in the share of revenue of the vocational education sector. The gross margin of the same caliber in Q17 was 22.54%, an increase of 1.8 percentage points over the same period last year. The three expense ratios increased significantly, and the net profit due to mother dropped sharply, and the company's three expenses ratio was 15.14%, up 6.15 percentage points from 2015. Quarterly data has shown an upward trend since Q1 2015. Among them, the sales expense ratio was 7.72%, an increase of 4.26 percentage points, mainly due to the company's inclusion of Shanghai Xuersen and Beijing Shangxue Cross-Examination Company in the consolidated report and increased investment in vocational education in 2016; the management expense ratio and financial expense ratio were 5.54%/1.88%, respectively, up 0.68/1.21 percentage points, respectively. The company accrued asset impairment losses of 100 million yuan, compared to 40 million in 15 years. The reason for the increase in the current calculation was due to Shanghai Xuersen's accruing goodwill impairment losses of 39 million yuan due to the liquidation of the Hangzhou Holding Training School, which is unsustainable. In addition, the subsidiary Cross-Examination Education completed the promise that the net profit returned to the mother for 17 years was not less than 46 million; due to the impact of relevant policies on the business, Xuersen was unable to meet the 17-year performance promise. The company's net profit to mother was $131 million, a year-on-year decrease of 63.41%. The company's forecast net profit growth rate for the first half of '17 is -40% to 10%. The company's payout ratio declined, the payout ratio increased, and the cash situation worsened. The company launched the third phase of equity incentives. The performance assessment target showed the company's confidence that the company's board of directors passed an equity incentive bill in '17. The incentive target was 311 people, covering the company's directors, middle and senior management, and core technical personnel. Corresponding revenue growth rate assessment targets were also set for the three periods when sales restrictions were lifted from 17-19, which were 12%/24%/36%, respectively. Equity incentives bind the interests of middle and senior management and core employees to the company, and the company's performance is expected to improve in the future. Investment suggestions While consolidating the building decoration business, the company is actively promoting the development of the vocational education business sector. In the past two years, it has continuously explored suitable vocational education business development models for the company through epitaxial mergers and acquisitions. Against the backdrop of declining prosperity in the decoration industry and high upfront investment in the vocational education business, profits declined significantly in 15/16. However, with the recovery in transit orders in 2017 and the acceleration of the integration of the education business, the company's performance is expected to reach an inflection point in the medium term. Furthermore, the granting of the third equity incentive increased the company's performance and unleashed momentum. First coverage, giving a “buy” rating. The company's 17-19 EPS is expected to be 0.18/0.25/0.34, and PE is 35/25/19, respectively. Risk warning: The vocational education business fell short of expectations, and investment in the real estate industry continued to decline