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　　机构：中金公司

　　评级：增持

　　目标价：1.80港元

　　Department store SSSG was +0.4% .supermarket SSSG was -3.4% . Bothformats showed a healthy trend of improvement.

　　In 2017, one new shoPPing mall was opened with atotal GFA of 110,000m2.

　　Operating margin to GSP for department stores stayed flat at 7.6%,but OP margin for supermarkets declined by 0.7ppt to 2.3%.

　　Trends to watch

　　Positives: 1) We are more positive about SSSG performance in 2018,as the overall offline retail industry is recovering . 2) Springlandhas rich asset value, with over 1mn m2of self-owned property.

　　Negatives: 1) Department stores still face fierce competition frome-commerce and other new shopping mall players. 2) Over 50% of itsdepartment stores are over eight years old and aging stores havelimited adjustment potential.Earnings forecastConsidering the recovering SSSG, we revise up our 2018 net profitforecast by 16.8% to Rmb352mn and forecast 2019 at Rmb362mn.Valuation and recommendationThe stock is trading at 8.8x 2018e P/E and 4.2x EV/EBITDA. Wemaintain our HOLD rating and lift our TP by 15.6% to HK$1.80, implying 1.9% upside from the currentshare price.RisksFierce competition; economic slowdown. 

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