Net profit increased 107%. In 2011, Dakang Animal Husbandry achieved operating income of 233 million yuan, an increase of 18.36% over the previous year; realized net profit of 35.56 million yuan, an increase of 107% over the previous year; the recovery in pig prices increased the overall gross profit margin. The continuous rise in pig prices since entering 11 years has caused the average sales price of the company's piglets/breeding piglets/fattening pigs to increase by 76.92%/-6.28%/26.03% respectively during the reporting period. The increase in product prices surpassed the increase in raw corn and soybean meal, increasing the comprehensive gross margin of 1H2011 by 5.90% compared to the same period. Stay optimistic about pig prices before the 2012 Spring Festival. Sluggish pig prices in 2010 and rising corn prices led to low profits in the farming industry, which greatly dampened the enthusiasm of small and medium-sized farmers, and withdrew from the pig breeding market one after another. As a result, supply and demand were tight in 11 years, and pig prices rose. The sow population reached an inflection point in February '11. According to the rules of the pig breeding cycle, we expect that there will still be a gap between supply and demand in the short term, and we are still optimistic about pig prices for 2 quarters. Fine-tune the product structure. The gross profit contribution of breeding pigs was reduced by 25%, and fattening pigs increased by 16%. The 300,000 ecological pig raising projects were put into production one after another in 11-13 years. In order to meet the smooth production, the company sold 30,300 breeding pigs in 1H, a decrease of 25% over the previous year. Maintaining a “cautious increase” rating, the target price is 17.50 yuan. We expect the company to sell breeding pigs/fattening pigs/piglets to 7/20 million heads in 11 years, and sell 20,000 tons of feed abroad; EPS for 1-13 is 0.40/0.54/0.61 yuan. Risk warning: pig prices fluctuate, and fund-raising projects reach production later than expected.