Investment highlights: Incident: The company plans to purchase 49% of Hemu Yangguang's shares held by Ren Yuanguo and 16% of Hemu Yangguang's shares held by Zhang Lihua through the issuance of shares and payment of cash, and raise supporting capital. After the transaction is completed, the company will hold 65% of Hemu Yangguang's shares, Ren Yuanguo will hold 21% of Hemu Yangguang's shares, Zhang Lihua will hold 14% of Hemu Yangguang's shares, and Hemu Sunshine will become a holding subsidiary of the company. The above equity valuation was $273 million, of which $70 million was paid in cash, while the remaining $203 million was paid through the issuance of shares at an issue price of $14.5 per share. With the acquisition of Hemu Yangguang, the layout of the big beef cattle industry has become more firm. Hemu Sunshine's main business is the cultivation and sale of crops such as wheat, rapeseed, wheat, alfalfa, and silage. At the same time, in order to establish a new agricultural management system combining agriculture and animal husbandry and promote the transformation and upgrading of the industrialization of animal husbandry, Hemu Sunshine introduced excellent breeds of beef cattle such as Angus for breeding. The cumulative actual net profit realized by Hemu Sunshine at the end of each year of 2016, year, and 2018 (specifically “the net profit realized by Hemu Sunshine after deducting non-recurring profit and loss after deducting government subsidies such as agricultural and animal husbandry subsidies included in current profit and loss”) was not less than 30 million yuan, 10,000 yuan, and 50 million yuan. The industry space is large, and the company is expected to become an integrator. The beef industry is large in China, and overall consumption is growing by 2-6% every year, which can accommodate several large companies. Among them, capital and technology are the core barriers of the industry. The company uses the platform of listed companies to recruit outstanding technical talents from large beef cattle breeding enterprises such as Xuelong to accelerate its layout in the beef cattle sector. The model of Wen's “company+farmer” reduces financial pressure to a certain extent, acquires Hemu Sunshine and uses Hutubi grassland resources in Xinjiang. The company's breeding costs are significantly lower than that of domestic peers. Under ideal conditions, the cost of imported beef from abroad will not increase much, and it is expected to become a leading enterprise in the domestic mid-range and high-end (Angus beef) market to replace smuggled beef. The crowdfunding model is expected to solve the difficulties and pain points in the layout of the beef cattle (sheep) industry. The beef cattle market has a large space, but the breeding cycle is long (from cows to fattening cows for more than 3 years), large capital investment, and intense competition in the downstream brand meat market. Using the form of consumer crowdfunding, it is hoped that the above problems will be solved. In terms of product attributes, there are many grades of beef, and there are large differences in consumer groups. Through online crowdfunding platforms, more consumers of different types are gathered and services are carried out in a differentiated manner. Consumers pay cash during crowdfunding. The company invests this part of the capital in introduction and breeding, reducing financial pressure. At the same time, it has targeted consumers before the product is marketed to determine production. Once beef is on the market, it can be shipped and distributed quickly to confirm revenue. Pay attention to the possibility that the Big Beef Cow (Sheep) strategy may exceed expectations, and you can take the opportunity to increase your holdings. The company is fully prepared for the implementation of the big beef cattle strategy: 1) Newbies have introduced breeding technical personnel in the past two years; 2) since this year, it has introduced about 13,000 to 14,000 breeding cows, and is expected to enter 2.6/3/32,000 Angus breeders in 15-17, respectively. The scale of Angus beef cattle launched in 16-18 is expected to reach 2000/6000/15,000 heads respectively (flexible. If sales volume and price are particularly good, they may be able to breed cows and sell them as beef cows), Angus breeders have the characteristics of tender meat quality and high meat yield. Representative of ; 3) Previously, a total of 84,000 mu of land held by the majority shareholders were purchased through additional issuance. It is planned to be used for forage production and fattening farm construction in the future, and it is still expected that land resources will continue to be obtained in the future; 4) Cooperation intentions have been reached with 100 farmers for cooperative fattening. The company has entered the beef cattle breeding industry, with an annual domestic output value of nearly 1 trillion yuan. Compared with the domestic cattle breeding industry with an annual output value of about 500 million yuan, the market space has increased significantly; the company currently has a market capitalization of about 2.58 billion yuan, which has the advantage of “small market value and large industry”. Big markets, small companies, maintain “increased holdings” ratings for the time being: Assuming that the company's Angus beef cattle are expected to be the top in 16-20, and that the hybrid cows of Angus cows and local breeds are sold separately, the company's net profit for 2015-2018 is expected to be 500/5500/16600/430 million yuan respectively. EPS per share after stock dilution is 0.02/0.27/0.825/2.0 yuan (profit forecast not adjusted), the corresponding 2016-2018 valuation is 63/21, respectively /9 times. The beef cattle market is large, the company's market capitalization is small, and there is a lot of room for growth. At this stage, it maintains an increase in holdings rating! Possible risks that require investors to pay attention to: the scale of beef cattle listing falls short of expectations, excessive losses in the early stages due to poor breeding technology levels, excessive losses in the early stages, a sharp drop in beef cattle prices, leading to a sharp drop in beef cattle prices that fall short of expectations, and excessive dilution in later mergers and acquisitions, etc.