The fiscal industry was less prosperous in the first half of the year, with revenue +2.77%, net profit of net income -47.03% in the first half of 2016, the company's operating income for the first half of 2016 was 732 million yuan, up 2.77% year on year. Net profit attributable to common shareholders of listed companies was 21.32 million yuan, down 47.03% year on year, achieving earnings of 0.033 yuan per share. Operating performance was in line with expectations. The year-on-year growth rate of the company's operating income in the first half of the year was lower than 5.82% in the same period last year and 21.43% at the end of 2015. The main reason for the decline in revenue growth was due to external factors such as economic and market decline, and the low prosperity of the food industry, especially prepared foods in the first half of the year. In the first half of the year, the revenue of the food industry was flat year on year, and gross margin decreased by 6.01% year on year; the logistics industry performed relatively well, with operating income increasing 8.31% year on year and gross margin increasing 15.73% year on year. Increase investment in sales expenses for new products. The second half of the year for new products is expected to gain momentum. The sales expenses rate for the first half of the year will increase by 2.92 percentage points over the same period last year, mainly due to the company's increased investment in advertising of new products, terminal promotions, and support from newly developed dealers. In the fourth quarter of last year, the company launched the “dark black milk” Tetra Pak ready-to-eat dairy-containing vegetable protein drink, and launched a “general sales attack” to rapidly increase the promotion of the product through various TV brands such as Zhejiang, Beijing, and Jiangsu. Last year, it was estimated that liquid products achieved overall revenue of around 300 million yuan. Furthermore, the company's strategy of “black nutrition and selenium-rich food” strengthened the marketing efforts of the new selenium-enriched rice product, and signed a strategic cooperation agreement with Hubei Jingmen City in February of this year, then realized the acquisition of Hubei, Beijing and the rice industry, focusing on creating selenium-rich foods. The second half of the year is the company's peak sales season. 2/3 of sales will be completed centrally. By paving the way for high-quality advertising resources in the first half of the year and increasing sales efforts in channels with poor sales, new products are expected to gain strength in the second half of the year. The operating cash flow situation improved in the second quarter, and financial expenses increased due to increased short-term loans. The net operating cash flow for the current period was -47.9 million yuan, mainly due to large advance payments in the first quarter; the operating cash flow situation improved in the second quarter, contributing 105 million yuan to operating cash flow in a single quarter. Cash flow from investment activities in the first half of the year increased by 69.98% compared to the same period last year, mainly due to more equity payments from subsidiaries obtained in the previous period. In the second quarter, the company obtained 262 million yuan in cash loans, mainly for debt repayment. The increase in short-term loans in the current period increased interest on corresponding loans. The financial expenses for the first half of the year were 5.92 million yuan, an increase of 347.11% over the same period last year. Companies that are subject to equity incentive requirements that may launch other acquisition projects require that the average annual revenue growth rate for 2016-2017 is not less than 30%, and that the deducted non-net profit is not less than 200 million yuan and 250 million yuan. Currently, the company has terminated its acquisition plan for Golden Day edible oil, and it is expected that other acquisition projects may be initiated to meet the incentive requirements. The growth rate of paste products slowed in the first half of the year, and the new product “dark milk” is closer to liquid beverages. It is expected that the second half of the year will perform well. According to estimates, the company's 2016-2018 EPS is estimated to be 0.31 yuan, 0.39 yuan, and 0.46 yuan respectively. Due to changes in share capital due to the company's implementation of equity distribution in 2015, the target price was adjusted to 8.5 to 9.0 yuan, maintaining the “increased holdings” rating. Risk warning: food safety issues, macroeconomic weakness.