Event: The company released its 2016 semi-annual report on the evening of August 25. In the first half of the year, the company achieved revenue of 1,020 million yuan, an increase of 14.42% over the previous year, and realized net profit attributable to the parent company of 39.78 million yuan, a decrease of 54.30% over the previous year. In the first half of the year, the company achieved an EPS of 0.02 yuan, down 54.36% from the same period last year. It is worth pointing out that the company's EPS in the first half of the year after deducting non-recurring profit and loss was 0.0178 yuan, up from 0.0058 yuan in the same period last year. Net cash generated from operating activities was RMB 38.84 million, down 74.76% from last year. Comment: In the first half of the year, the company still faced downward pressure: due to intense competition for agricultural products at home and abroad, price fluctuations, and high economic pressure in the afternoon, and the high cost of production materials and labor costs, the company's profits were still under great pressure. In mid-May of this year, part of the fruit base of the Tiaoshan branch was affected by cryofrost damage, causing direct economic losses of 37.52212 million yuan. The total area affected by the disaster was 8848.32 mu. The development situation of major industries and subsidiaries in the first half of the year is not optimistic. With the exception of Lvxin Beer Ingredients Group, which achieved a net profit of 3,062 million yuan, an increase of 84.78% over the same period last year: Teda Housing Brokers achieved net profit of 993,300 yuan, an increase of 48.78% over the same period last year. Other industries are not optimistic. Tianyuan Pasture Grassland Group achieved net profit of 6.7776 million yuan, a decrease of 50.92% from the same period last year; Potato Industry Group achieved net profit of 233 million yuan; international trade companies achieved net profit of 1,725,600 yuan, a decrease of 146.51% from the same period last year; Inner Mongolia Yasheng Yate Water Saving Co., Ltd. achieved net profit of 1,7393 million yuan; Yuerhong Mining achieved net profit - 199,600 yuan; Kangyi Animal Husbandry achieved net profit - 203,400 yuan; Gansu Yasheng Yate Water Saving Co., Ltd. achieved net profit of 1,316,400 yuan ; Dunken Fruit achieved a net profit of 194,700 yuan, an increase of 84.85% over the same period last year. Ruisheng Yameite Hi-Tech Agriculture Co., Ltd. achieved net profit of 3.773 million yuan, a decrease of 6.51% over the same period last year. Agricultural industrialization, increased integration of production and marketing, and further optimization of the industrial structure: In the first half of the year, the company further highlighted the development position of specialized subsidiaries throughout the company, concentrating advantages on the development of the five major specialized industrial groups of hops, forage, water-saving equipment, potatoes, and food; established the “Yasheng Good Food Group” food group to drive the development of the food cultivation industry on the basis of the company's original sales team, channels and market, 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 2-3 cultivation structures for dominant cultivation crops and other crops as specialty crops. Crop concentration 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. Promoting supply-side reforms and asset exchange: In the first half of the year, the company actively complied with agricultural reclamation reform, further optimized the asset structure by injecting high-quality assets; placed the focus of management on the transformation of agricultural production methods, management methods and resource utilization methods, further strengthened production process management, corrected distortions in the allocation of agricultural factors, and promoted supply-side structural reforms. The creation of high-yield demonstration zones has become a starting point for agricultural supply-side reforms, and leading industrialized subsidiaries have begun to bear fruit. Steadily advancing all assets and liabilities of the mining branch, Shengyuan branch, supply and marketing branch to which Yasheng Co., Ltd. belongs, and 100% of the shares in green space. Five cases with Gansu Agricultural Reclamation Group for the replacement of land and related agricultural assets totaling 272,300 mu of land and related agricultural assets have been completed on schedule. The company's future performance is very flexible, and the agricultural year will soon be over. Although the company's development has encountered many difficulties in recent years, and the downward pressure is strong, with the continuous optimization of the company's industrial structure and industrial level, continuous improvement of internal management, and improvement of risk resistance, 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 fluctuating prices of these cash crops, we expect that both the company's performance improvement and market opportunities will greatly improve. The agricultural year facing the company is nearing its end. Profit forecast and investment rating: We expect the company's earnings per share for 2016-2018 to be 0.08/0.09/0.11 yuan, respectively, and the corresponding PE is 65/59/49 times, respectively. Considering that the company has more opportunities in emerging industries, we maintain the company's “Overweight” rating. Risk factors: adverse changes in relevant national agricultural policies, poor strategic cooperation, changes in management teams, etc.