Incidents. On October 11, the company released a performance forecast for the first three quarters of 2016. The net profit range for the first three quarters was 100 million yuan - 140 million yuan, and earnings per share of 0.397 yuan - 0.556 yuan. In 2016, the company's profitability improved quarterly, with a profit of 43.12 million yuan to 83.12 million yuan in the third quarter. The sales prices of the company's main products, VB2 and VB6, increased sharply year-on-year in the first three quarters of 2016, and the price of raw corn flour continued to decline. At the same time, the company effectively improved work efficiency, reduced production costs, and enhanced the company's profitability through measures such as optimizing production processes, innovating sales models, and strengthening market management. In 2016, Q1 achieved net profit of 2.06 million yuan and Q2 net profit of 33.82 million yuan. According to the median performance forecast, the Q3 quarter was around 63 million yuan, exceeding the results of the first half of the year, and the performance improved quarterly. VB2 and VB6 prices are at their highest levels since the 3rd quarter, and the fourth quarter results are expected to continue to improve. As of October 11, 80% of mainstream companies in the feed-grade VB2 market quoted around 270-280 yuan/kg, some manufacturers quoted 300 yuan/kg, VB6 market price was 220-240 yuan/kg, some manufacturers stopped production and maintenance, and spot market supply was tight. We expect VB2 and VB6 product prices to maintain an upward trend. If we look at current product market prices, VB2 is at a high price level since the third quarter. VB6 prices will continue to rise after the correction in May and June. Our company's performance for the 4th quarter is expected It will continue to improve. The price of corn starch continues to decline, and the cost of the product is falling. Half of the company's operating costs are raw material costs, and the company's main raw material is corn flour. In 2016, the price of corn was determined by the market. The government gave certain subsidies to corn producers. Producers accompanied the market to sell corn, forming a new market pattern with diversified buyers and sellers and multi-channel distribution. Along with the listing of new corn, corn prices continued to decline in 2016. In October 2015, the price of corn starch in Shandong dropped to 2,000 yuan/ton. Tons fell 20%, and the prices of major raw materials continued to drop, causing the company's product gross profit to continue to increase. The company is a resource integration platform for the Changtou Group. The company's shares were transferred in July 2014. In the equity change report, the majority shareholder Changchang Investment Group stated that the shares were transferred because they were optimistic about the future development prospects of the biomedical industry and hoped to use the Guangji Pharmaceutical share acquisition as an opportunity to vigorously develop the biomedical industry and build a biomedical industry chain; at the same time, when conditions were ripe, the listed company platform was used to effectively integrate high-quality assets to expand and strengthen the listed company. Profit forecasting and investment advice. The competitive pattern of VB2 and VB6 is stable, and product prices are on an upward trend. Based on the annual average price of VB2 and VB6 at 250 yuan/kg and 260 yuan/kg, the net profit attributable to shareholders of the parent company from 2016 to 2018 is expected to be 184 million yuan, 235 million yuan, and 284 million yuan respectively. The corresponding EPS is 0.73 yuan/share, 0.93 yuan/share, and 1.13 yuan/share, respectively. Given the upward trend in product prices, the price of raw corn starch has declined weakly, and profitability continues to improve. The 2017 30XPE corresponds to a target price of 27.90 yuan within 6 months, maintaining a “buy” rating. Risk warning: Risk of large fluctuations in product prices; risk of construction of biological industrial parks falling short of expectations.