Investment points: It is one of the leading domestic enterprises in breeding good breeds of cows, and its main product is high-quality frozen bull essence. The company's good breeds subsidized for bulls accounted for the largest share (7.0%), and the amount of frozen essence subsidized for good breeds ranked first (10.5%) in the market share (10.5%). In 2013, the company's operating income was 82.657 million yuan, and frozen essence accounted for 71.6% of revenue. The company is rich in germplasm resources, including 6 excellent international breeds, and has the most complete range of American Holstein cows in the country. The domestic breeding industry is dominated by the national seed subsidy policy. Furthermore, in 2020, the company became the exclusive seller in China of “Beijing Global,” the exclusive domestic distributor of American Global Breeding Co., Ltd., and expanded the company's frozen essence business in China. Relying on the advantages of cattle breeding, explore the strategy of integrating the beef cattle industry chain. The company has the foundation of good breeding and slaughter and processing industries, and plans to establish beef cattle projects integrating breeding, cultivation, breeding, and slaughter and processing in the future. Following the establishment of a model breeding farm for beef cattle in 13-14 (a total of 1,000 cows were listed in the year), the introduction of breeding cows (about 5,000 heads), and the initial implementation of the “company+farmer” cooperative breeding model, the company now issued shares to purchase assets, and plans to use 68,500 mu of agricultural development land and 156,000 mu of grassland to build two beef cattle feedlots without fodder production to achieve the “integrated breeding” model. It is expected that the first batch of more than 1,000 beef cattle will be released in 2016, achieving initial profit. Equity incentives and restricted stock incentive plans provide comprehensive incentives for middle and senior management. The company plans to grant a total of 70 non-core technical business backbone to middle and senior management, including Chairman Dong, to grant 3 million of the company's restricted stock options of not less than 1 million yuan, stock options with an exercise price of 23.69 yuan. The exercise conditions are that the 15-17 net profit growth rate is 20%/40%/60% of the average net profit in 202-14, and the operating income growth rate is 30%/60%/90% lower, reflecting the company's confidence in medium- to long-term growth. Investment suggestions: The annual domestic output value of the company's main cattle breeding industry is about 500 million yuan, and the annual output value of beef cattle breeding to be developed is close to 1 trillion yuan. The company's development of a beef cattle industry chain integration project has entered a new field with broad market space; in 14-16, it is expected to achieve operating income of 0.91/1.64/238 million yuan, a year-on-year increase of 10.2%/79.7%/45.4%; achieve net profit of 890.0/2464.5/3,752,000 yuan, year-on-year increase of -7.4%/176.9%/52.2%; after full dilution EPS 0.10/0.24/0.37 yuan The company currently has a market capitalization of about 2.2 billion yuan. It has the advantage of “small market capitalization and large industry” and has been given an “increase in holdings” rating. Catalysts for stock price performance: increased construction of beef cattle feedlots, beef and lamb slaughter and processing sales exceeded expectations, and beef cattle projects achieved profit. Risk factors: The construction schedule of beef cattle feedlots is two low expectations, and the sales volume and price of beef and lamb are two low expectations.