Incidents We recently attended the company's 2016 Investor Exchange Meeting and had exchanges with management. 1. Based on rice wine, vigorously develop new wine business, cross-regional layout: the company adheres to rice wine as the foundation to build a multi-wine development platform. In terms of rice wine business, the company simultaneously promoted expansion to other provinces and cities such as Zhejiang and Jiangsu through marketing penetration and mergers and acquisitions. In May 2015, it wholly acquired Zhentai Liquor in Wuxi City. Its “Huiquan” brand maintained a leading market share in Wuxi and Yixing, Jiangsu, and actively expanded to surrounding regions, continuously expanding its influence in the industry. In terms of new wine types, the new “bold” brand cooking wine products founded by the company and its own brand “Meisheng Family” wine products have laid the foundation for building a multi-wine business pattern. 2. Using the advantages of upstream and downstream industry chains, innovative launch of wine e-commerce products has shown initial results: the imported wine market is developing rapidly. In 2015, China's wine imports increased by 42.36% year on year, making it one of the fastest-growing food and beverage sub-industries. The company has resource support from the upstream and downstream supply chains of the group and has an innate advantage. The average age of the company's wine team is less than 30 years old. They creatively propose a seven-angle radar map of wine ratings. Through ratings in different dimensions of taste and flavor, consumers can quickly find wine suitable for their own taste. Furthermore, by collecting consumer feedback, we find products that best suit the tastes of Chinese consumers, so that production can truly be based on demand. At the same time, the company actively explores e-commerce channels, develops various innovative ways to drink wine, enhances consumers' drinking experience, and expands drinking scenarios. The company has now connected with mainstream e-commerce platforms and launched a number of themed marketing campaigns to achieve the top three e-commerce imports in the wine category. The total sales on the day of Double Eleven in 2015 exceeded 5 million yuan, ranking second among the most popular wine brands. 3. Cooking wine products enter a blank market and expand the number of rice wine consumers: The company launched a “bold” cooking wine brand in 2015, taking advantage of the company's rice wine production technology to enter the condiment market. The company has brand and channel advantages in the core region of Jiangsu, Zhejiang, and Shanghai rice wine, and is easy to enter the market. In terms of catering and special channels, the main focus is on developing non-rice wine core regions. The company has strengthened services and updated and upgraded products. For example, the central kitchens of large restaurant chains such as Xiaonanguo, Jiangsu, Zhejiang, and Hui have begun to use the company's cooking wine products. 4. Management model transformation to promote product restructuring and channel flattening: After the company completed the acquisition and integration of Shaoxing Baita and Wuxi Zhentai, the production capacity layout became more perfect, gradually shifting from a single production base management to a production model coordinated by headquarters and collaborative development of subsidiary production bases. Shikumen Company and Wuxi Zhentai focus on large-scale production, while Shaoxing Baita focuses on Shaoxing origin, small-batch, specialized, and personalized product production. The company actively promoted product restructuring and channel flattening. In 2015, the sales volume of the high-end core brand “Shikumen” series increased 17% year on year; the sales volume of the “Golden Years” series increased 6% year on year, and the share of high-end products reached 64.38%. In terms of market expansion, the company has built suburban markets and out-of-city markets with a sales scale of 10 million, such as Jiading in Shanghai, Qidong in Jiangsu, and Haimen, and has cultivated five markets with a sales scale of 5 million, including Yancheng, Nantong, and Nanjing in Jiangsu, and has continued to expand its advantageous regions. 5. Profit forecasting and ratings: Under the leadership of a new generation of young management, we adhere to the multi-wine platform development strategy, boldly experiment with new categories, seize young consumers, and expand the consumer base. Imported wine is particularly worth looking forward to. We expect the company's earnings per share to be $0.19, $0.21, and $0.25 respectively in 2016-2018, giving it a “recommended” rating. 6. Risk warning: 1) The company's new product sales fell short of expectations; 2) food safety incidents.