Motong raised the target price of Daphne (00210-HK) from 2.6 yuan to 7.7% to 2.8 yuan, but maintained its “reduced holdings” rating. Daphne's core brand business recorded a 9.5% year-on-year decline in same-store sales in the first quarter of this year. However, not only did this decline not put pressure on its stock price, but the rise in stock prices combined with J.P. Morgan, a major bank, raised its target price. The reason for the detailed price increase in the core brand business in the first quarter was that same-store sales in the core brand business “fell very little”. The lower double-digit decline compared to the expectations of the Group and the bank is better, and I believe it will have a positive impact on stock prices. When the group announced last year's full-year results in March, it was stated that same-store sales for the first quarter of 2014 were expected to have low double-digit negative growth compared to the same period last year due to the fact that the 2014 Spring Festival arrived earlier and the shopping period was shortened. Negative growth in low double digits is not much of a gap from the current 9.5% figure, but this is enough to change the way Daphne thinks about Daphne. Hosoma raised Daphne's profit forecast for the next three years (that is, 2014/15/16) by 6%/5%/3%, respectively, and remained cautious about the Group's prospects. However, the bank is concerned about Daphne's high inventory levels, which will put pressure on Daphne's sales and profit margins; and Daphne's plans to open more branches may reflect that the group's management is too optimistic.