The company announced the 2017 interim report. Net profit increased by 40.29% year on year on the evening of August 18. The company announced the 2017 interim report. 1H2017 achieved operating income of 1,226 billion yuan, a year-on-year decrease of 3.88%; realized net profit of 34.46 million yuan, a year-on-year increase of 40.29%, equivalent to an overall dilution of EPS of 0.12 yuan; and achieved net profit of 36.96 million yuan, a year-on-year decrease of 3.09%, in line with expectations. The company expects the year-on-year change in net profit for the first three quarters of 2017 to range from 58.27% to 68.83%. The main reason for the same increase was the decrease in management expenses due to increased interest income and a decrease in the number of paid leavers. Looking at the company's revenue by business format, the retail/service sector achieved revenue of 1,182 million yuan/701,000 yuan respectively, a year-on-year change of -3.55%/-19.23%. Looking at the quarterly split, 2Q2017 achieved revenue of 580 million yuan, a year-on-year decrease of 3.37%, a decrease of less than the same decrease of 4.33% in 1Q2017; realized net profit of 18.45 million yuan, an increase of 26.29% year-on-year, and an increase of less than 60.86% in 1Q2017. The consolidated gross margin decreased by 0.78 percentage points, and the period expense ratio decreased 2.67 percentage points year on year. The consolidated gross margin of the 1H2017 company was 19.50%, down 0.78 percentage points year on year. Among them, the gross margin of the retail business was 17.14, down 0.08 percentage points year on year. The 1H2017 company's period expense ratio was 14.75%, down 2.67 percentage points from the previous year. Among them, the sales/management/finance expense ratio was 1.92%/12.87%/-0.04%, respectively, up 0.24/ -2.07/ -0.83 percentage points from the same period last year. Continuously promote category optimization, focus on state-owned enterprise reform, expect the company to effectively carry out creative marketing activities throughout the year, further optimize category management, and strengthen experiential business formats to enhance customer retention capabilities with the marketing theme of “30 Years of ZTE Chuancheng”. During the reporting period, the company invested 137 million yuan to purchase China Resources Oak Bay Phase III 14 #商业独立体，目前已进入开店前筹备阶段。 The company's property value is outstanding, and equity is concentrated. It is recommended to pay attention to the reform expectations of state-owned enterprises. Maintaining profit forecasts and buying ratings We maintain our forecast for the company's fully diluted EPS in 17-19 at $0.44/ 0.47/ 0.50, respectively. Considering that the company has expectations for state-owned enterprise reform, the buying rating has been maintained. Risks suggest that consumer consumption growth is falling short of expectations, and the level of competition in regional markets is intensifying.