The incident announced the 2016 Semi-Annual Results Report. Revenue for the first half of 2016 was 960 million yuan, up 5.96% year on year; net profit was 97.91 million, down 34% year on year; total assets increased 10% year on year; and basic earnings per share was 0.09, down 30.8% year on year. A brief review of the year-on-year slowdown in revenue growth, looking at the year-on-year growth of first-tier and second-tier supermarkets, is still worth looking forward to a 5.96% year-on-year increase in the company's revenue compared to last year, and the growth rate has declined. Currently, for the whole year, there is a slight pressure to reach our forecast of 6.8% revenue growth. Considering that the company continues to invest in Tier 1 and 2 supermarket channels, the first-tier supermarkets in particular seem to have made significant progress and changes this year. If progress is smooth, it is expected that the overall product revenue growth will continue to be worth looking forward to. After deducting non-return net profit to achieve a slight increase in short-term gross margin, the company's net profit for the first half of 2015 may fall by 148 million, of which investment income is more than 87 million (mainly from the Hexing (Tianjin) equity investment fund), non-recurring profit of 66.95 million, net profit after deduction of 81.42 million; net profit for the first half of 2016 was 97.91 million, and investment income decreased by 79.39 million (mainly from the Hexing (Tianjin) equity investment fund). Investment income in the first half of the year is about 7 million, and non-recurring profit and loss is expected to drop sharply, but non-recurring profit and loss is expected to drop sharply The possibility of an increase in net parent profit Reached about 5%, achieving a slight increase. On the other hand, due to the increase in the company's production capacity and the replacement of new and old factories, the upfront cost of putting the new plant into use is high, which may cause a short-term decline in gross margin. We believe that the company has implemented a large single product strategy over the medium to long term. The gross margin of the two major single products, fresh noodles and original brewing, currently remains above 40%. Affected by the investment costs of the new plant, the slight decline in gross margin will not have much impact on the company's overall profit. The performance of various products is stable, and it is difficult for Yunchou to achieve profit in the short term. There is little problem with the single product “fresh noodles” achieving the revenue target of 200 million this year, and there is a lot of pressure for “original brewing” to achieve the target of 50 to 60 million, considering that the new product launch market has not yet fully opened up. However, monosodium glutamate, which dragged down overall performance last year, is expected to grow steadily this year. Vinegar is expected to grow at a faster rate, and the company is more optimistic. In terms of tea seed oil, there will be some performance when the amount of tea seed oil is blended. Pure tea seed oil has not been generally accepted by the market in the short term due to its high price. It has been affected by major health trends over the long term, and will be favored by high consumers. In 2015, the company invested in Changsha Yunchu, which was in a state of loss. We believe that e-commerce will take a certain amount of time to penetrate the market and consider the initial stage of operation and management. For Yunzhu e-commerce, the popularity and delivery timeliness created by the promotion efforts are the focus of attention on whether it can be profitable, and Yunchou may not bring significant positive investment returns to the company in the short term. Profit forecast and valuation: On the product side, the company started production of 200,000 tons of high-quality soy sauce in 2015 and is expected to generate large profits in 2016 and 2017; in terms of vegetable oil, the company relies on “tea seed oil”, and with the release of 10,000 tons of tea seed oil production capacity and continuous sales investment, while raw material prices remain stable, the upgrade of vegetable oil product structure is expected to bring about a profit increase in vegetable oil. The two major production capacity bottlenecks of condiments and vegetable oil have been broken through, and product supply has been guaranteed. In terms of channels: The company has begun to focus on supermarkets and catering channels in first-tier cities, and has set up new e-commerce channels. We believe that market cultivation is a medium- to long-term process, and channel expansion is difficult to see results in the short term. In fact, since its inception, the company has always been concerned about high-end products. Due to market environment restrictions, production capacity for high-quality products has been released, channels have expanded to regions with high consumer demand, and the expansion of product demand in first-tier cities has been remarkable. In the long run, the expansion of the company's first-tier cities and catering channels may be effective in 3-5 years. Considering the current PE 50 times, which is at a high level, the target price is 8 yuan, and the “increase in holdings” rating is given.