Incident Company released its 2016 semi-annual report for the first half of 2016, achieving revenue of 480 million yuan, an increase of 8.72% over the previous year; net profit of the net profit of the mother of 35 million yuan, a decrease of 5.96% over the previous year; and net profit after deduction of 33 million yuan, a decrease of 11.49% from the previous year. The second quarter alone achieved revenue of 145 million yuan, down 8.04% year on year and 56.84% month on month. A brief review of the Wuxi Zhentai Liquor Industry is driving the growth of rice wine revenue, and cooking wine and wine have maintained relatively rapid growth. The company's main business revenue in the first half of the year was 477 million yuan, an increase of 8.51% over the previous year. Among them, rice wine revenue was 473 million yuan, an increase of 8.36% over the previous year; other alcoholic beverages achieved revenue of 3,5561 million yuan, an increase of 32.85% over the previous year. The gross margin of rice wine and other alcoholic beverages declined by 1.67 and 1.57 pct year-on-year respectively, causing the gross margin of the company's main business to fall by 1.70 pct to 48.17%. Shanghai achieved revenue of 377 million yuan, down 3.32% year on year; revenue outside Shanghai was 99.56 million yuan, up 102.39% year on year. The main reason is that the period for the merger of Wuxi Zhentai Liquor into the listed company report for the same period last year was only one month. In the first half of the year, the company set up a sales branch with the Wuxi Zhentai Liquor Industry as the main body to fully launch the integrated brand layout in southern Jiangsu. Wuxi Zhentai Liquor's 2016 H1 revenue was 49.9263 million yuan, a year-on-year increase of 37.323 million yuan, and net profit of 2.097 million yuan, a year-on-year increase of 3,875,800 yuan. The complete merger of Wuxi Zhentai Liquor also became the main reason why the company's rice wine revenue increased by 36.52 million yuan year-on-year in the first half of the year. The sales expenses ratio rebounded, and net sales interest rates declined, and the company's sales expenses increased 16.82% year-on-year to 95 million yuan in the first half of the year. The main reason was the increase in wages, remuneration, and business operating expenses related to sales after the acquisition of Zhentai Liquor. The sales expense ratio increased by 1.37 pct year on year, the management expense ratio decreased by 2.87 pct, the financial expense ratio increased by 0.35 pct, and the total cost ratio during the sales period decreased by 1.16 pct. However, due to the decline in gross margin, the company's net sales margin fell 0.77pct to 6.71% year on year. Profit forecast: In recent years, through external mergers and acquisitions, the company's rice wine group has taken over the Haipai, Zhejiang, and Soviet factions from the seven major factions to achieve a cross-regional layout between Jiangsu, Zhejiang, and Shanghai. Brands such as “Shikumen”, “Golden Age”, “He” Liquor, and “Huiquan” form a high school and low tier brand structure. On the basis of the absolute advantage of the core market in Shanghai, they are simultaneously expanding to other provinces and cities such as Zhejiang and Jiangsu through marketing penetration and mergers and acquisitions. The “100,000 ton rice wine technology transformation project (phase II) project” raised by the company is expected to be completed within the year, which can provide production capacity support for the company's expansion throughout East China. On the other hand, cooking wine is distributed through the original rice wine channel and many chain stores owned by **** Group. Wine rose to prominence through the “OEM light asset production model+e-commerce sales model.” Last year, it achieved the top three e-commerce imported wine category transactions, and sales continued to improve this year. According to the company's strategic vision of building a multi-wine industry development platform with rice wine as its core business, it is likely that in the future, **** Food Group will transfer its shares in Quanxing Liquor to Jinfeng Liquor in some way to enter the liquor industry in order to enter the liquor industry. We forecast that the company's revenue in 2016-2018 will reach 11.63, 12.74 and 1,401 million yuan respectively, net profit of 0.80, 0.91 and 1,023 million yuan respectively, and EPS of 0.15, 0.18, and 0.20 yuan/share respectively, giving an increase in holdings rating and target price of 12.5 yuan.