The profit for the first three quarters is expected to be 1-140 million yuan. The company announced that it expects net profit attributable to shareholders of listed companies from January to September this year to be 1-140 million yuan, corresponding EPS of 0.397-0.556 yuan, and a loss of 1962.45 million yuan for the same period last year. Based on a median calculation of 120 million yuan, the company achieved net profit of 63.12 million yuan in Q3 (marginal profit in the same period last year), which nearly doubled month-on-month, showing an accelerated growth trend. The continued improvement in the company's performance was mainly due to rising sales prices of the leading product, Vitamin B2, and falling production costs. The decline in corn prices helped expand the company's profit margin. Corn is the main raw material for vitamin B2 production, accounting for about 70% of the cost; after the National Day holiday, domestic corn prices declined further. According to data from the National Bureau of Statistics, the latest domestic second-grade yellow corn price fell 18.4% year on year. In the medium term, domestic corn supply pressure still exists, which will help expand the company's profit margin; in addition, as the main ingredient in feed, the fall in corn prices also helps reduce the sensitivity of feed companies to vitamin price increases. The increase in vitamin B2 prices is expected to reach the peak season for downstream demand for vitamin B2. In the context of increased industry concentration, mainstream companies represented by the company are more willing to raise prices. According to Boya Hexun data, 80% of feed grade product dealers are priced at 265-300 yuan/kg, and 98% of products are priced at 360-380 yuan/kg. At the same time, there is still great uncertainty about the actual commissioning of new production capacity such as Shengxue Dacheng, and there is potential for further increases in vitamin B2 prices. Reiterating that the “increase in holdings” rating is combined with the company's third-quarter performance forecast and recent corn price trends, we raised the company's 2016 and 2017 EPS to 0.74 and 1.15 yuan (the original forecast was 0.67, 1.08 yuan). Based on sales volume of 2,500 tons/year, the price of vitamin B2 increased by 10 yuan/kg (or 10,000 yuan/ton). Assuming that the cost and tax rate remain unchanged, the company's EPS increased by about 0.06 yuan. The company's performance is highly flexible, and there are certain state-owned enterprise reform expectations, combined with the majority shareholders' secondary market increase price (17.84) -19.69 yuan). The current stock price has a good risk-return ratio. The company is given 22-24 times PE in 2017, and the corresponding target price is 25.3-27.6 yuan, reaffirming the “increase in holdings” rating. Risk warning: There is a risk that product price increases will not progress as expected, and there is a risk that the prices of raw materials such as corn will fluctuate greatly.