Incident: The company issued an announcement stating that the board of directors of the company reviewed and passed the “Proposal on Shanghai Zhengda Jingcheng Enterprise Development Co., Ltd. and Shenzhen Zhongke Hongyi Venture Capital Co., Ltd. to transfer 33% and 32% of the shares held by the subsidiary Oriental Homeland Co., Ltd., respectively”. Our view: 1. Transfer part of Dongfang Jiayuan's subsidiary shares to speed up strategic focus. According to the board meeting bill, the company will transfer 33% and 32% of the shares in Dongfangjiayuan Industrial, a subsidiary of Dongfangjiayuan, at a price of 243 million and 236 million yuan respectively. The transferees are Shanghai Zhengda Jingcheng Enterprise Development Co., Ltd. and Shenzhen Zhongke Hongyi Venture Capital Co., Ltd. After the transfer, Dongfangjiayuan still holds 35% of the shares of Dongfangjiayuan Industrial Co., Ltd., the largest shareholder, and holds a majority of seats on the board of directors of Dongfangjiayuan Industrial, so Dongfangjiayuan Industrial will still be included in the company's consolidated statements. We believe that this transfer shows that the company is adhering to the philosophy of investment holding companies and introducing strategic cooperation to optimize the allocation of resources and expand and strengthen the Oriental home. At the same time, this also means that the company will focus more on the three major sectors of agriculture, finance, and minerals in the future, and agriculture will be the company's strategic focus for the next few years. On the other hand, we note that the company agreement stipulates that the transferee must pay 480 million yuan as an advance payment within three working days after signing the agreement. We believe that this capital will help reduce the company's funding for Oriental Homeland and help the company free up capital to plan and invest in strategic industries. 2. Further cooperate with Ruiyuan Capital to improve Oriental Homeland management. We noticed that Shanghai Zhengda Jingcheng Enterprise Development Co., Ltd. is a subsidiary of Ruihuan Capital Holdings Co., Ltd. (ARCH), and Ruihuan Capital increased its capital in 2008 for Oriental Homeland Home Furnishing Building Materials, a subsidiary of Oriental Homeland. Therefore, the two parties to this transaction already have a good foundation of cooperation, and the possibility of the transaction being aborted is small. As a company listed on the AIM market on the London Stock Exchange in 2006, Ruiyuan Capital mainly invests in the distribution and retail sector in China. Currently, the company has successively held and participated in Youa Shares, Goodboy, Shanghai Hualian Jimaisheng, Hainan Airport Group, Huiyin Electric Chain, Piper Group, Ningxia Dairy Industry, Shanghai New Focus Auto Service, Heguang Apparel, and Shanghai Jiadeli Supermarket, etc., and has considerable investment and management experience in the commercial distribution field. We understand that at present, Ruihuan Capital has formed a management team to enter Oriental Homes to fully assist in managing Oriental Homes. We believe that through further cooperation with strategic partners with rich experience in commercial circulation management, Oriental Homeland's management improvements will be worth looking forward to. 3. By selling shares at a premium, the company's Oriental Home Assets will reduce losses in 2011. Dongfangjiayuan has a total of 27 stores. Dongfangjiayuan Industrial, which has transferred shares this time, owns more than 10 Dongfangjiayuan stores, and more than 10 stores in Dongfangjiayuan Home Furnishing & Building Materials, another subsidiary of Dongfang Homeland. According to the report for the third quarter of 2010, the book value of the transferred shares was 323 million yuan, the purchase price was 480 million yuan, the premium rate reached 48.61%, and the PB reached 1.48X. After the company's transfer, the premium income obtained will be included in the 2011 capital reserve. If the company relinquishes control of the company in 2011, that is, relinquishes its absolute majority position on the board of directors or continues to transfer shares, this portion of the equity income will be included in the profit and loss of 2011, and Dongfang Jiayuan Industrial will not be included in the consolidated statement. If we look at the current holding of controlling interests, due to the decline in the company's share of loss-making assets, the company's net profit on Dongfangjiayuan assets in 2011 will also be clearly reduced. Assuming that according to the 2010 three-quarter report, the company's loss reduction margin reached 30.21 million yuan, which is equivalent to EPS of 0.02 yuan. 4. Short-term financing notes of 500 million dollars are in place to buy raw grains, and small-packaged rice is progressing steadily. Oriental Group has issued an initial short-term financing note of 500 million yuan; this 500 million yuan will be used to buy raw grain. We calculate the average cost of raw grain based on 3,000 yuan. The company's capital of 500 million yuan can cover the purchase of 166,700 tons of raw grain. The company is progressing in an orderly manner with small packages of rice. We learned that the company's small packages of rice can already be found in many supermarket stores in Beijing and Shanghai. As the Spring Festival is approaching, the company is currently focusing more of its energy on gift channels. At the same time, it will take some time for Daohuaxiang, which was purchased at the end of 2010, to go public on a large scale. We expect the company to enter supermarkets through large-scale retail channels in February. 5. Profit forecast and risk tips. We maintain the company's 2010-2012 EPS profit forecast of 0.13 yuan, 0.32 yuan, and 0.52 yuan. Subsequent equity transactions will be tracked and calculated based on the closing price of 7.95 yuan on the previous trading day. The corresponding dynamic price-earnings ratios for 2010-2012 were 63X, 25X, and 15X, maintaining the company's “increase in holdings” rating. Risk warning: 1) Sales of small-packaged rice fell short of expectations; 2) the company's expenses exceeded expectations; 3) profits from assets such as Oriental Homeland continued to deteriorate.