Core views: Events: In the first three quarters of 2020, the company achieved revenue of 15.08 billion yuan, +1.5% year-on-year; realized net profit of 170 million yuan, -27.2%; realized net profit after deduction of net profit of 140 million yuan, or -37.3% year-on-year. Among them, the third quarter alone achieved revenue of 4.73 billion yuan, -1.2% year-on-year; realized net profit of 3.069 million yuan, +127.3%; and realized net profit of 1.157 million yuan after deduction, +107.8% year-on-year. The revenue growth rate slowed slightly in the third quarter, the profit decline narrowed, and the recovery trend was obvious. Gross margin remained stable, and sales and management expense ratios declined: (1) The company's gross margin for the first three quarters of 2020 was 23.32%, down 0.96pp year on year; gross margin for the third quarter alone was 24.97%, up 1.12pp year on year, and remained stable overall. (2) The fee rate for the first three quarters increased by 0.06pp to 21.98% year on year. Among them, the sales expense ratio decreased by 0.23pp to 18.25% year on year; the management expense ratio decreased by 0.02pp to 1.79% year on year; and the financial expense ratio was 1.81%. Digital transformation accelerated, adding 2.16 million new digital members in a single quarter: (1) The company comprehensively promoted digitalization. According to the three-quarter report, it achieved 22.97 million digital members in the first three quarters, contributing 78% of total sales, adding 2.16 million new digital members in the single third quarter; (2) the company vigorously developed the “home” business. By the end of September, there were 356 in-home stores, with online sales accounting for 17.04% of total sales in the first three quarters. (3) Digital operations accelerated in the first three quarters, with store sales growth of 12.68% in the first three quarters. 10.4 %, the fee rate is a comparable decrease of 0.9%. Profit forecast and investment suggestions: As a retail leader in the southwest, the company has a flexible combination of supermarket+department stores. The home appliance business has been further strengthened, and the digital transformation is beginning to bear fruit. The estimated net profit of Backgammon in 2020-2022 is 230 million yuan, 320 million yuan, and 40 million yuan respectively. Referring to comparable company valuations, it gave a valuation of 40×PE in '21, corresponding to a reasonable value of 1,48/share, and maintained a “increase in holdings” rating. Risk warning. Macro consumption is sluggish; leading supermarkets in the country have entered the Hunan market; the growth rate of the “home to home” business has fallen short of expectations; and the operating results of the Jingteng cooperation project have fallen short of expectations.