Fucheng's revenue for the first three quarters was +1.44%, and net profit was +8.56% year-on-year, in line with expectations. The revenue for the first three quarters of 2016 was 1,027 million yuan, up 1.44% year on year; net profit attributable to shareholders of listed companies was 147 million yuan, up 8.56% year on year; net profit attributable to shareholders of listed companies after deduction was 119 million yuan, down 9.24% year on year. The amount of non-recurring profit and loss for the first three quarters was 27.87 million yuan, mainly due to the sale of the dairy farming branch in September. An additional investment of 2.195 million Australian dollars in the Australian subsidiary was used to acquire Maviswood Farms and high guaranteed water quotas. In order to expand animal husbandry capacity and optimize the industrial layout structure, Fucheng will invest an additional 2.195 million Australian dollars in the Australian subsidiary to acquire a 430.60 hectare (6579 acres) Maviswood Farm and a 670 trillion increase in guaranteed water quota. The investment funds are all covered by the company. Based on the earlier acquisition of Magnolia, Greenbury, and Lumin Farms, the acquisition of related assets can optimize the industrial space layout, improve the quality of the grassland, increase load capacity, and increase operational flexibility in terms of the smell and waste treatment of the neighboring company's slaughterhouse. The characteristics of graveyard services are similar to gas distribution, and development opportunities for integrators have only just begun. The graveyard services currently provided by Fucheng Co., Ltd. are very similar to the gas distribution industry in the 2000s. Judging from the historical development of the industry, both were dominated by the public sector in the past. As local welfare undertakings, the level of participation of the private sector was very low. In terms of industry attributes, due to the nature of utilities, there is a natural monopoly in the region. Local gas distribution and operation rights and operating cemeteries are scarce, so it is very unlikely that new entrants will cause the competitive landscape to deteriorate. Judging from the way the industry expands, both need to use project mergers and acquisitions and alliances to expand the scope of business coverage. The first offsite expansion project in Yixing, Jiangsu was launched, and Fucheng Hehui M&A Fund, a subsidiary of Fucheng Co., Ltd., acquired 60% of the shares in Longshu Cemetery in Yixing City, Jiangsu Province at a consideration price of 200 million yuan, marking the implementation of Fucheng's first offsite expansion project, which is of great significance. First, it dispelled market concerns about Fucheng's ability to break out of traditional advantages in the Beijing-Tianjin-Hebei region to achieve offsite expansion; second, the Yangtze River Delta region where Yixing is located is within the scope of influence of Fushouyuan. The successful implementation of this project also showed the advantages of Fucheng Co., Ltd. as the only A-share listed company in the funeral industry in terms of epitaxial expansion. The prototype of an integrator in the domestic cemetery service industry has emerged. Fucheng Co., Ltd. is expected to use listed company platforms to integrate the domestic cemetery industry, which currently has a very low concentration of concentration. The current balance ratio of 23.87% of Fucheng shares and the 62.33% shareholding ratio of the majority shareholders and their co-actors also provided more diversified means and more space for epitaxial acquisitions. The implementation of the Jiangsu Yixing project also confirmed our earlier judgment on Fucheng's epitaxial expansion capability. According to our profit forecast, the EPS of Fucheng Co., Ltd. in 2016 to 2018 was 0.25 yuan, 0.28 yuan, and 0.32 yuan, respectively. Using the segmented valuation method, Fucheng Co., Ltd. was given a target market value range of 145 to 15.5 billion yuan for 6 months, corresponding to the target price range of 17.70 to 18.93 yuan, maintaining a “buy” rating. Risk warning: Funeral industry regulations have been strengthened, and the direction of marketization has been reversed; food safety issues.