The seed industry is the focus of the company's strategy and will continue to be strengthened in the future. In recent years, the company has strongly deployed the seed market through mergers and acquisitions. Currently, it holds 8 seed companies and already owns various varieties including wheat seeds, rice seeds, corn seeds, potato seeds, etc. In 2015, seed business revenue reached 615 million yuan, achieving gross profit of 153 million yuan. Seeds have become the main source of the company's gross profit, accounting for 56%. Wheatseeds, in particular, has achieved revenue of nearly 300 million yuan and has become the leading wheat seed enterprise in China. In the future, the company will further strengthen its layout in terms of seeds: first, increase investment in R&D to enhance the company's technical strength and speed of new product launch; second, continue to expand the company's seed business market through mergers and acquisitions to promote the company's platform strategy. The seed industry is still in the de-inventory stage. The performance of the company's holding subsidiaries falls short of expectations. This year's performance growth mainly comes from Henan Agrochemical. In 2015, China's seed industry remained sluggish due to high inventories and falling corn prices. The performance of the company's subsidiaries generally fell short of expectations and failed to fulfill their performance promises. It is expected that the performance of the company's original seed company will not improve significantly this year. The company's performance growth this year will mainly come from Henan Agrochemical, which was acquired in 2015. In 2015, the company only listed Henan agrochemicals for the two months of November-December, and this year it will achieve a consolidated list for the whole year. In 2015, Henan Agrochemical achieved a net profit of 34.75 million yuan, and is expected to achieve a net profit of around 50 million yuan in 2016, thus driving the growth of the company's performance. The company is actively expanding the agricultural service business, which will open up room for the company to grow. In 2015, the company and four natural persons from Henan Huangfan District Industrial Group Co., Ltd., Henan Zaohua Noodle Co., Ltd. and Yang Bingzhong jointly invested in the establishment of Zhoukou Zhongken Modern Agricultural Industry Co., Ltd. Currently, the company mainly relies on farms in Huangfan District to provide large-scale farmers (farms) with comprehensive agricultural services, from the supply of agricultural materials such as seeds, fertilizers, and pesticides to technical services and later storage and processing. Currently, agricultural service companies mainly serve farms in Huangfan District, with only a small number of other farmers, but with the advancement of local land circulation and the development of large-scale farmers, the company's clients will continue to expand. We believe that compared with other companies that have deployed agricultural services, the company has three advantages in carrying out agricultural service business: 1. The company is a leading wheat seed enterprise in China, and the company has obvious advantages in developing agricultural service business in wheat cultivation areas in Henan; 2. The company's business itself has seed, fertilizer, and pesticide business, and downstream storage and processing are also arranged. It has formed an integrated business layout for agricultural services, which can be relied upon to organically integrate the company's various businesses and develop collaboratively; 3. The company is backed by the China Agricultural Development Group, and the group company has a large amount of farm land resources. The company has a large amount of farm land resources. The company has a large amount of farm land resources. There is also close cooperation between farms in Henan and Huangfan District. Farm resources have provided strong support for the company to develop agricultural service business. China Agricultural Development Group's reform expectations are strong, and the company's asset injection can be expected. Among the assets of China Agricultural Development Group, we found that there are still many unlisted assets in the planting industry, such as China-Africa Agricultural Investment Co., Ltd., International Agricultural Cooperation and Development Co., Ltd., Zhongmushan Danma Racecourse, China Animal Husbandry Group's Mudanjiang Military Racecourse, and China Agricultural Reclamation (Group) Corporation. In China alone, the China Agricultural Development Group has 560,000 mu of arable land, 900,000 mu of woodland, and 1.95 million mu of grassland. Overseas, it also owns assets such as the Sino-Zambian Friendship Ranch. In the context of state-owned enterprise reform, it is more likely that China Agricultural Development Group will securitize more unlisted assets in the future, so this part of the planting industry assets is likely to be injected into the agricultural development and seed industry. Give a “Recommended” rating. As the only planting industry listing platform for the China Agricultural Development Group, the company has a clear strategy for expanding the seed industry layout through mergers and acquisitions. It integrates the company's various business lines through large agricultural service businesses to open up the company's growth space. Strong future asset injection expectations do not take into account mergers and acquisitions. The company is expected to achieve earnings of 0.25 yuan, 0.28 yuan, and 0.31 yuan per share in 16-18, and the price-earnings ratio corresponding to the current 12 yuan stock price is 47 times, 42 times, and 39 times, respectively. However, the company is currently well-funded, with more than 500 million dollars in monetary capital at the end of 2015. M&A activities will continue in the future, thus driving the company's performance to grow at a higher rate. Risk warning: 1. Seed production risk; 2. Extended development falls short of expectations; 3. Agricultural service progress falls short of expectations; 4. Asset injection falls short of expectations.