Our view 1. The only listing platform under Guangdong Trading Group, mixed reform brings new development opportunities: the controlling shareholder of the company is Guanghong Asset, which belongs to Guangdong Trade Holding Group. The group's core business is trade logistics, medicine and health, food industry and trade, and commercial real estate. The total assets in 2014 were 12.3 billion yuan and revenue was 14.9 billion yuan. The company is the group's only listing platform. In November 2015, the Guangdong Provincial State-owned Assets Administration Commission set a target of 3 to 5 years for capital operations for provincial enterprises. The key elements include increasing the asset securitization rate and speeding up the overall listing. It requires that by 2017, the securitization rate of provincial enterprises reach 60%. Currently, the overall securitization rate of commercial and trade holding groups is low. From the perspective of increasing the securitization rate, we believe that one method is for the trading group to go public as a whole, and the other method is to rapidly increase the market value of its listed platforms through extension. In December 2015, the controlling shareholder of the company completed mixed reform and introduced Xin Jin'an as a shareholder. Its main business is real estate development and management business. In the same month, Cai Biao, the company's new chairman, took office. He is under 40 years old and has held key positions at both the controlling shareholder and group levels. In July 2016, the company's core executives increased their holdings of the company's shares by 57 million yuan through asset management plans, with an average price of 9.06 yuan/share. The promotion of mixed reform, the appointment of a new chairman, and management shareholding all reflect the determination and execution of the company's reform and development, as well as executives' judgment on the underestimation of the company's value and confidence in future development. 2. The main business is stabilizing, cash is abundant, and land reserves are abundant, and endogenous development can be expected: the company's main business is meat food and the distribution of educational publications. The meat food business is mainly cold storage business and frozen meat business; the education publishing and distribution business mainly provides textbooks, teaching aids, etc. for primary and secondary schools. It has more than 60 chain outlets in the province, and is one of the two channels for the distribution of free textbooks for primary and secondary schools in Guangdong Province. The company's revenue in 2015 was 1,927 billion yuan, up 27% year on year. Among them, revenue from education publication distribution business was 846 million yuan, up 20.3% year on year, and food business revenue was 1,081 billion yuan, down 7.8% year on year. The company's overall performance growth rate is stabilizing. The education publishing and distribution business has reached a CAGR of 21.3% in the past three years, and the development trend is good; the food business has had a CAGR of -0.45% in the past three years, and business growth has been weak in the past two years. In 2016, Q3 had a cash account of nearly 400 million yuan, and invested about 400 million yuan in commissioned financial management. In addition, the company has 5 major land resources. Tanzhou Town in Zhongshan and Dali in Nanhai, Foshan are idle. In the future, value can be increased through development and utilization or sales to provide financial support for the company's future business development. Profit forecast and rating: We expect the company's 2016-2018 net profit to be 1/1.15/133 million yuan, EPS 0.17/0.2/0.23 yuan, PE 66/58/50 times. The completion of mixed reforms, the appointment of a new chairman, and management shareholding injected vitality and momentum into the company; abundant cash on the books and abundant land reserves provided sufficient ammunition for subsequent internal and external expansion development. The company's main business is stabilizing. For the two major business segments, the “cold storage+market” business focuses on assets and has low gross margin; education sector companies have channel advantages, the education industry is improving overall, demand for quality education resources is strong, education technology promotes fairness in education and amplifies the value of quality education resources, and the Civil Promotion Law opens up space for securitization. We judge that the company may continue to deploy in the education sector in the future. First coverage, giving a “recommended” rating. Risk warning: Downside risks in main business, downturn in extension progress, and downside risks in valuation centers caused by market style changes.