Key investment points: The company announced an interim report, which is in line with expectations. During the reporting period, the company achieved total revenue of 50.45 million yuan, a year-on-year increase of 17.1%, net profit loss of 10.13 million yuan, and earnings per share of -0.06 yuan, in line with expectations. Meanwhile, the company expects the January-September results to remain at a loss. The Big Beef Cow Strategy changes the company's development trajectory and expands the development path. The company is mainly engaged in the breeding business of cattle and sheep, and relies on biogenetic technology to provide high-quality genetic materials such as frozen sperm and embryos and related services for China's animal husbandry industry. However, due to limited market space, intense competition, and strong influence from procurement policies, etc., the company began researching and implementing the “Big Beef Cow Strategy” in 2014. It is proposed to form a beef cattle industry with a whole industry chain of “introduction, breeding, fattening, slaughter, processing, and sales services” based on animal husbandry and breeding. In the process of industrial chain integration, a closed loop of the industrial chain is achieved through various methods such as self-construction, cooperation, mergers and acquisitions, etc., and efforts are being made to create a “upstream control of breeding resources, midstream control of processing and production, and downstream control of distribution channels” to achieve a commercial operation model linked to the industrial chain. This is used to change the traditional model where traditional farming is scattered and farming efficiency is low, so as to achieve the goals of increasing the scale and modernization level of enterprise production and processing, shortening the market circulation process, and building a consumer brand. The company's subsequent layout was carried out jointly by China and overseas (Australia). On the domestic side, about 7,000 cows that can reproduce have expanded from Xinjiang this year, and another 6,000 cows (nearly 5,000 beef cows, more than 1,000 cows) arrived in Hong Kong at the end of the month to be raised in Hulunbuir. Previously, the acquisition of Hutubi land resources by the group company Hutubi will be stopped, and in the future, pasture will be stopped to provide feed ingredients for farming; overseas, it has built a high-end brand through the import of live cattle and beef. Beef is a product with large differences in value between categories. In the future, the company will provide consumers with a multi-level selection of beef products, and is expected to cooperate with leading domestic Internet companies to sell meat products in the form of crowdfunding. Through this method, the problem of large capital investment in beef cattle breeding in the early stages has been effectively solved, and the expansion of the company's breeding scale has accelerated. Pay attention to the possibility that the big beef cow strategy may exceed expectations, and you can take the opportunity to increase your holdings. The company is one of the leading domestic enterprises in breeding good breeds of cows. Its main product is bull freeze. Domestic subsidized bull breeds account for the largest share (7.1%), and the market share of subsidized frozen meat for good breeds is among the highest (10.5%). Relying on its advantages in the field of cattle breeding, the company plans to expand integrated beef cattle projects, issue shares to acquire assets and purchase a total of 84,500 mu of land. In the future, it is planned to be used for forage production and feedlot construction to create an integration of “breeding, breeding, planting, slaughter, processing, and sales”. It is expected that the beef cattle project will achieve initial profit in 2016. The company has entered the beef cattle breeding industry, with an annual domestic output value of nearly 1 trillion yuan, a significant increase in market space compared to the domestic cattle breeding industry with an annual output value of about 500 million yuan; the company currently has a market capitalization of about 2.2 billion yuan, which has the advantage of “small market value and large industry”. Of course, the certainty of the company's beef cattle launch scale also needs to be determined based on factors such as capital and downstream channel development. We conservatively estimate that in 15-17, it is expected to achieve operating income of 0.91/1.64/238 million yuan, a year-on-year increase of -25%/80%/45%; achieve net profit of 1,500/2464/37.52 million yuan, a year-on-year increase of 737%/67%/52%; EPS 0.08/0.13/0.2 yuan after full dilution (profit forecast not adjusted). If according to optimistic assumptions, the company's beef cattle sales scale reached 155/30,000 heads in 16-17, then net profit in 16-17 is expected to reach 65 million yuan and 100 million yuan respectively, maintaining the “increased holdings” rating.