Description of the incident 1. The Northeast Economic Revitalization Plan has been reported to the State Council and is expected to be approved in the short term; 2. The State Council once again held a working conference on revitalizing old industrial bases in Northeast China to study and promote the development of Northeast China, demanding that equipment manufacturing be strengthened, that modern agricultural comprehensive support reform tests be promoted, and that open platform construction be strengthened for Northeast Asia; 3. The company announced that it has signed a cooperation framework agreement with Jiangsu Weikell Pharmaceutical Technology and plans to cooperate on new drugs and generic drugs and chemical projects such as VCP-2, which is being developed under the leadership of Vikel Technology, and promised to acquire some of Vickell's shares It also continued to increase capital to 60%. Incident comment Under the high concentration of cement in the Northeast region, the leading pricing voice is strong. Since 2011, cement prices in the Northeast region have continued to be high, mainly due to high regional concentration (the five leading enterprises of the North, Yatai, Shanshui, Tianrui, and Jidong), and the strong ability of enterprises to collaborate and stabilize prices, thus clearly supporting profitability. With the introduction of the Northeast China Economic Revitalization Plan, it is expected that certain policy incentives will be carried out in terms of urbanization, shed reform, etc., and regional cement demand is expected to improve markedly (the cumulative growth rate of cement demand in Northeast China was 3.7% in the first 6 months, and Jilin was 1.3%, all at the bottom level). The business is gradually being transformed to accelerate the development of the pharmaceutical pillar industry. Currently, the company's pharmaceutical business already has a drug research and development center, three manufacturing enterprises, and a pharmaceutical chain retail enterprise. This cooperation further highlights the company's willingness to gradually transform. The current market capitalization is clearly undervalued. The company has various types of assets, so there is also room for revaluation of market value similar to Jinyu shares. The company holds 30.7% of Northeast Securities (16 billion dollars), 9.96% of Bank of Jilin (net assets of 15.9 billion at the end of 2013), about 20 million tons of equity cement production capacity, 6 billion dollars based on replacement costs of 300 yuan per ton, and 1 billion pharmaceutical assets (one capsule for human rabies vaccine and anti-tumor products), with annual revenue of 900 million yuan, while the company's current market capitalization is less than 8 billion yuan. Management participation in private promotions highlights long-term business confidence. In May of this year, the company announced a private distribution plan. Among them, the management plans to subscribe for 98.57 million shares at a price of 347 yuan, for an amount of 340 million yuan, for three years, showing full confidence in the company's operations. Regional revitalization+business revitalization, there is a lot of room for valuation repair. The short-term companies' coal, financial, and building materials assets are the source of the switching style, and there is a theme of regional revitalization. In the medium to long term, valuations are expected to continue to rise as the company's business gradually transforms and the focus of development is skewed. It is estimated that the EPS for 14/15 will be 0.37 or 0.50 yuan, and the corresponding PE will be 11.6 or 8.6 times. I continue to recommend it!