Event description: Since October 30, 2009, the company's stock price has accumulated a cumulative increase of 17.34%. The agricultural industry index has risen 9.3% and the Shanghai Composite Index has risen 6.57% during the same period. We believe that the positive trend in the company's stock price is related to restructuring expectations, and investors are advised to pay attention to transactional investment opportunities. Comment: 1. Expectations of corporate restructuring are strong. The majority shareholder of the company is the Changde branch of the Agricultural Bank of China. According to the Commercial Banking Law, financial institutions are not allowed to hold shares in non-financial institutions. When the Changde branch of the Agricultural Bank of China transferred the company's shares in June 2006, it promised to dispose of the shares already held within two years. Currently, the two-year period has long passed. On September 29, 2009, the company announced that an on-site inspection by the supervisory authorities found that “the Agricultural Bank of China, the majority shareholder of the company, has failed to fulfill its commitment to dispose of its shares within two years,” and ordered it to be rectified. The company has submitted a written report to the majority shareholders to assist in carrying out the restructuring work. 2. Historical review of company shares held by the Agricultural Bank: In June 2006, through a judicial ruling, the Agricultural Bank of China transferred 146 million shares from Changde Grain and Oil Corporation, the former majority shareholder of the company, to obtain a shareholding ratio of 43.27%, and is in a relative controlling position. (See Chart 1) As 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 clearly promised in the acquisition letter to dispose of the shares held within two years. After the Agricultural Bank held shares, the shareholding ratio has been reduced to 20.62% (as of June 30, 2009, see chart 2) through equity distribution reforms and active holdings reduction, etc., and is still in a controlling position. 3. Company fundamentals: The brand value of “Jin Jian” rice is a highlight. The company is located in Hunan Province and listed in 1998. It is the first company in China's grain and oil system to go public. The company currently has 15 holding subsidiaries, covering fields such as grain and oil, pharmaceuticals, dairy, food, etc. In mid-2009, grain and oil accounted for 56% of revenue, while major infusions (pharmaceuticals) accounted for 27%. The company's core business is currently the rice business, and the company's rice business has three major points of interest: (1) the rice brand “Jin Jian” is a well-known trademark in the country, ranking third in the top ten rice brands in the country; (2) Located in Hunan Province, Hunan Province is a major rice province in China and has a location advantage. The company has five rice production bases and a production base area of about 3.2 million mu; (3) The marketing network is relatively complete. The company's marketing network is based on 7 branches and has 1 national logistics center, covering about 100 cities across the country. We believe that the brand value of “Jin Jian” rice may be the biggest attraction for potential reorganizers. (See chart 3, 4, 5) 4. Whose family will reorganize? (1) Judging from the distribution of the top ten shareholders, with the exception of the Changde branch of the Agricultural Bank of China, which is a state-owned corporate shareholder, all other shareholders are tradable shareholders. Comparing the shareholder situation disclosed in the interim report and the third quarterly report, it can be seen that the shareholding ratio of the tenth largest tradable stock in the third quarter has already exceeded the shareholding ratio of the second-largest shareholder in the interim report, so it can be said that at present, with the exception of the largest shareholder, all shareholders of the company are individuals. Therefore, we judge that the company's possible restructuring parties in the future will not be among the top ten current shareholders (see chart 6 and 7); (2) because the company's current business is running normally, we believe that the restructuring party's business is unlikely to be very different from the company; (3) previously there were market rumors that a large grain and oil group enterprise might accept the company's shares held by the Agricultural Bank. We believe that from the perspective of the operation of the rice industry chain and the integration of brand value, this is still possible, but as of now, this is just a conjecture. 5. The restructuring schedule is undecided; focus on transactional investment opportunities. Although the company's restructuring expectations are clear, the direction and restructuring party have yet to surface. We will continue to monitor the company's restructuring process and recommend investors to pay attention to relevant short-term transactional investment opportunities. 6. Profit forecasts and ratings. If restructuring expectations are not taken into account, the company's fundamentals are currently poor. The company's EPS for 2009 and 2010 is expected to be 0.01 yuan and 0.03 yuan. Based on the closing price of 7.59 yuan on November 5, the corresponding dynamic price-earnings ratios are 759X and 253X, respectively, maintaining a “neutral” rating.