Incident: We investigated Jin Jian Rice Industry. The company's director, director, and securities affairs representative were invited to discuss the company's development plans and business conditions. Rice processing is squeezed at both ends. The company now has 150,000 tons of rice processing capacity and needs to collect 300,000 tons of rice. As a brand of rice, it is necessary to guarantee the supply of rice. It is difficult to be dynamic in choosing the timing of the purchase, and the cost of buying rice upstream is constantly rising. The company's brand of rice mainly enters supermarkets, and prices are monitored to a certain extent. Price increases of some varieties require approval, and are being squeezed upstream and downstream. Rice processing enterprises are struggling to survive in the gap, making it difficult for rice processing enterprises to survive in the gap, making it difficult for them to achieve results. The company sells mainly middle and high-end rice, with a gross profit of only 8%, and the gross profit of mid-grade rice is even less than 5%. There is a problem with difficult acquisitions, and the costs are high. Since the supply at the purchase end is in short supply, farmers' millet is not sunburned, and it is taken away directly. The moisture content is high, generally around 20%, while the state regulation cannot exceed 13.5%. After recovery, there are 5 points that need to be digested by enterprises to enter the drying system. There are energy and material consumption during the drying process. The high moisture content has directly led to high acquisition costs. At the same time, depreciation is higher than that of similar companies. The company's initial investment was large, all imported equipment, and maintenance costs were high. In the past, 30,000 tons of production capacity invested nearly 100 million yuan, far higher than the current investment costs of similar enterprises of 20 million to 30 million yuan. Jinjian Pharmaceutical remains the main source of profit. As of December 31, 2009, Hunan Jinjian Pharmaceutical Co., Ltd. had total assets of 359,745,222.05 yuan and liabilities of 183,667,821.97 yuan. It is expected to contribute 300 million yuan in operating income in 2010, gross margin of about 40%, net profit margin of 10%, and contribution profit of 30 million yuan, which is the main source of the company's profit. Tokuyama Pharmaceutical Factory's A line has achieved an annual production of 40 million bags of soft bag infusions through technical improvements. Through repurchases, shares have risen from 97% to 100%, and there are currently no plans to further expand production. Affected by the sales radius, it is difficult for the dairy industry to expand in scale. The company's dairy industry is mainly pasteurized fresh milk, which is kept at 5 degrees Celsius for 5 days. As a local brand, sales conditions are good, but due to the impact of the sales radius, it is difficult to expand on a large scale. The company added a room temperature line in 2009, and the variety of sales increased, so that the sales revenue of the dairy industry in 2010 increased by about 15% compared to the same period last year, but due to its small share of sales revenue, its contribution to profit was limited. Income from the seed industry is stable, and rice processing and pharmaceuticals will continue to dominate in the future. The company controls Jinjian Seed Industry and owns 73.66% of the shares, the registered capital of the seed industry is 30 million yuan, annual sales revenue is maintained at 30 million yuan, gross profit is about 35%, and net profit is expected to be 1.5 million yuan. In the future, the company's main business will still focus on rice and pharmaceuticals. Currently, the company's rice brand ranks third among the top ten brands in the country. Government subsidies are an important part of profits. Apply to relevant departments at the national, provincial, municipal and other levels for projects such as the industrialization of scientific research results of deep processing of grain and oil, agricultural industrialization, technical reform and interest rates, drying and energy efficiency, transformation of major national scientific and technological achievements, service platforms for small and medium-sized enterprises, and the Provincial Research Center for Deep Processing of Rice. It received a subsidy of 15 million yuan in “development funds for leading chemical enterprises” to support key agricultural industries at the national level in 2010. Obtaining government subsidies is an important part of the company's profits. The company is expected to be restructured. The Agricultural Bank, the largest shareholder of the company, transferred 146 million shares and held 43.27% of the shares from Changde Grain and Oil Corporation, the former majority shareholder of the company, through a judicial ruling in June 2006 to pay off debts. The Commercial Banking Law stipulates that financial institutions are not allowed to hold shares in non-financial institutions. The Changde branch of the Agricultural Bank promised to dispose of shares in 2 years. Through equity distribution reform and persistence, the shares of Agricultural Bank, the largest shareholder, fell from 43.27% to 20.62%. The handling of 20.62% of the shares and the replacement of the largest shareholder is more certain from a regulatory point of view. Our company's brand awareness and channel resources are highly attractive to investors. Performance tends to be lackluster, and restructuring is waiting for an opportunity. Judging from the company's current business structure, it is expected that 2010 to 2012 will all be marginally profitable. EPS is 0.01 yuan, 0.03 yuan, and 0.05 yuan respectively, corresponding to the high valuation of the current stock price, and a neutral rating. Higher stock prices mean higher restructuring costs, and we need to wait patiently for the right time.