The results for the first three quarters were in line with our expectations, and Youa Co., Ltd. announced the results for the first three quarters of 2019: revenue of 4.424 billion yuan, down 16.8% year on year; net profit to mother of 322 million yuan, down 34.7% year on year, corresponding to profit of 0.23 yuan per share; deducted non-net profit fell 33.8% year on year, which is basically in line with our expectations. On a quarterly basis, 2019 Q1/Q2/Q3 revenue was -27.6%/-8.8%/-7.7% year-on-year, while net profit to mother was -38%/-31.9%/-29.5% year-on-year, respectively. Trend 1. The decline in retail and real estate businesses affects revenue side performance. Revenue for the first three quarters fell 16.8% year over year. By business, 1) retail revenue decreased by 10.25% year on year, mainly affected by increased market competition and the operation adjustment and closure of the Youa Spring Changsha store; 2) Real estate business revenue decreased by 77.34% year on year, mainly due to confirmed revenue from the May 1st Square underground shopping center project in the same period last year. At the same time, revenue from the Youa International Plaza project in Shaoyang decreased compared to the same period last year. 2. Increased cost ratios drag down profitability. The consolidated gross margin for the first three quarters decreased by 0.3 ppt year on year, and the third quarter of a single quarter increased 0.8 ppt from the second quarter. On the cost side, the cost ratio increased by 4.9ppt to 18.7% year-on-year during the first three quarters. Among them, the sales expense ratio increased by 1.2ppt to 7.1%, the management fee ratio increased by 2ppt to 8.4%, and the financial expense ratio increased by 1.6ppt to 3.1%, mainly due to an increase in interest expenses on loans and the cessation of capitalization of completed development projects. Under the combined influence, the net profit margin for the first three quarters decreased by 2ppt to 7.3% year on year. 3. Follow up on the progress of diversified retail formats. The company continues to promote innovation in the department store business and implement the transformation of traditional department stores into outlets. At the same time, the company is developing a diversified business layout to establish a wholly-owned subsidiary, Youa Convenience Supermarket, and plans to launch the 7-Eleven convenience store business in Hunan Province under a franchise model. In addition, the company is promoting the construction of new retail, developing an online sales platform, gradually promoting informatization of logistics and finance modules, and expanding omni-channel marketing. The profit forecast and valuation keep the current profit forecast unchanged. The current stock price corresponds to 15/14 times P/E in 2019/2020. Maintaining an outperforming industry rating and target price of RMB 4.5, corresponding to 22/20 times P/E in 2019/2020. The current stock price has room to rise 41%. Competition in risk areas intensified, and the performance of new stores fell short of expectations.