Matters: We recently had telephone communication with the company, and in conjunction with the recently released three quarterly reports, we have analyzed and anticipated the development of various businesses such as pioneer seeds and lint processing. Key points of analysis: Pioneer Seed's production capacity continues to expand, and the profit level of subsidiaries will increase dramatically by the end of 2009. Dunhuang Pioneer Seed Company (51% of the company's shares) phase 3 and 4 projects will be completed and put into operation. Its seed processing capacity and actual output will reach 28,000 tons and 18,000 tons respectively, double that of 2008. At the end of 2010, Dunhuang Pioneer's production capacity will also increase by 25%. In the next 2-3 years, production capacity will double from 2009. We believe that the main variety of Dunhuang Pioneer, Xianyu 335, combines various characteristics such as single grain sowing, high yield, resistance to insurrection, and collapse resistance. It has an obvious competitive advantage, and has continued to sell well since it was launched in 2007. It is likely that it will replace Zheng Dan 958 as the leading variety in the corn seed market, so sales will not be a problem. We are optimistic about Pioneer's excellent marketing pricing capabilities and expectations of seed price increases spawned by medium- to long-term increases in grain prices, but we have not ignored the supply pressure brought about by the drastic expansion of production capacity and the competitive pressure caused by other varieties keeping up. Based on comprehensive considerations, we believe that the sales price of Xianyu 335 in 2009 and 10 is expected to increase by about 10% and 5% to 24 yuan/kg and 26 yuan/kg. At the same time, assuming that the company maintains its current gross profit and net profit levels unchanged, it is estimated that the net profit of Dunhuang Pioneer Company in 09 and 10 years will reach 155 million yuan and 273 million yuan respectively, and the net profit of the corresponding contributing parent company is about 79 million yuan and 139 million yuan respectively. The lint business is expected to reduce losses quarter by quarter. The company's poor performance in recent years is mainly due to the parent company's lack of control over the lint processing business. In particular, the first three quarters of 2009 were affected by falling cotton prices. The mid-term gross profit of this business was -2%. For the first time, there was an inversion between cost and sales price. It is expected that the business will gradually return to normal later as cotton prices rise. The proposed fund-raising project is conducive to enhancing the long-term profitability of the company. In September 2009, the company announced that it plans to issue 50 million shares on a non-public basis, raising more than 500 million yuan, mainly in highly profitable projects such as ketchup production, oil processing, and dehydrated vegetable processing. If the project is successfully implemented in 2010, it will help expand the scale and revenue share of the company's existing food processing business and enhance the company's long-term profitability. The “buy” investment rating is estimated to be 0.23 yuan and 0.64 yuan respectively for the company's EPS in '09 and 10. The current stock price is 18.22 yuan, and the corresponding PE is 79.2 times and 28.47 times, respectively. Considering that the company's short-term performance growth is explosive, and that the valuation level of the seed sector is high, the company is given a “buy” investment rating.