Event: The company released its 2016 three-quarter report on October 28. The company achieved revenue of 1.47 billion yuan in the first three quarters, an increase of 2.36% over the previous year. It achieved profit from the main business of 297 million yuan, a year-on-year decrease of 3.92%, and realized net profit attributable to the parent company of 54.35 million yuan, a decrease of 49.15% over the previous year. The company achieved an EPS of 0.03 yuan in the first three quarters, down 3 cents from the same period last year. It is worth pointing out that the company's EPS for the same period in the first three quarters was 0.02 yuan after non-recurring profit and loss compared to 0.01 yuan in the same period last year. Net cash from operating activities was 12.2 million yuan, down 85.19% from last year. Comment: The company's performance in the first three quarters was still under downward pressure: due to intense competition for agricultural products at home and abroad, price fluctuations, and high economic pressure in the afternoon, high production costs and labor costs, and natural disasters, the company's profits were still under heavy pressure in the first three quarters. In the first three quarters, the parent company's statement revenue increased 17.58%, and net profit attributable to the parent company decreased from 85.79 million yuan to a loss of 10.6 million yuan; consolidated statement revenue increased 2.36%, and net profit attributable to the parent company decreased by 49.15%. Agricultural industrialization, increased integration of production and marketing, and further optimization of the industrial structure: Since this year, the company has further highlighted the development position of specialized subsidiaries throughout the company, concentrating its advantages on the development of the five major specialized industrial groups of hops, forage, water-saving equipment, potatoes, and food; and established the “Yasheng Good Food Bank” food group, with overall planning and marketing on the basis of the company's original sales team, channels and market, driving the development of the food cultivation industry, connecting all aspects of production, processing and sales through market means; at the same time, expanding the company's peripheral base through demonstration leadership and order radiation. Each branch has separately established a planting structure of 2-3 dominant crops and other crops as specialty crops. The concentration of crops has been further increased, and the foundation for the development of leading industries has become more solid. The company has steadily expanded the scale of cultivation of crops such as forage and potatoes, the management of crops such as hops and red dates has become more refined, and the order model for crops such as chili peppers and sunflower is becoming more and more mature. The establishment and operation of Yasheng Haoshibang Food Group will promote the improvement of processing capacity and production line operation efficiency of major agricultural products such as red dates and chili peppers, so that a number of agricultural products with agricultural reclamation and Yasheng characteristics will gradually enter the market. Through the operation of Good Food Bank, the specialty cash crops produced by the company will be directly connected to the consumer market, changing the passive situation where the company's product sales process is being squeezed by major customers. We believe that in the future, Good Food Bank will drive the company's development into a new era. The company's future performance is very flexible, and the agricultural year will soon be over. Although the company has encountered many difficulties in its development in recent years, and the downward pressure is strong, with the continuous optimization of the company's industrial structure and industrial level, the continuous improvement of internal management, and the improvement of its ability to withstand risks, in particular, the company's layout in hops, fruit, alfalfa, and potatoes will bear fruit in the next few years. Coupled with the characteristics of large price fluctuations of these cash crops, both performance improvements and market opportunities will greatly improve in the context of inflation. The agricultural year facing the company is nearing its end. Profit forecast and investment rating: The company's earnings per share for 2016-2018 are expected to be 0.08/0.09/0.11 yuan, respectively. The PE forecast for the next three years is 66/63/52 times, respectively. Although the current performance of the company is not optimistic, considering that the company's emerging industries have greater opportunities, we maintain the company's “increased holdings” rating. Risk factors: adverse changes in relevant national agricultural policies, poor strategic cooperation, changes in management teams, etc.