Investment highlights: Tobacco flakes are growing rapidly, and capacity acquisitions provide long-term driving force: The company's tobacco flake business increased 141% year over year to HK$473 million in the first half of fiscal year 2014, with a relatively rapid growth rate. China's tobacco flake industry has a lot of room for future development. It is expected to maintain a growth rate of 20%, yet production capacity cannot grow rapidly. Currently, the company has 2 wholly-owned production lines with a production capacity of 30,000 tons of tobacco flakes; furthermore, the company holds 40% of the shares in Golden Tree Gold Leaf, and the cooperative production line has a total production capacity of 10,000 tons. The company currently plans to build a new production line of 5,000 tons. It is expected to reach production in the 14-15 fiscal year, and the total asset capacity will reach 39,000 tons in the future. We believe that it is difficult for the company to rapidly increase supply through self-built production capacity. Currently, there is a lot of cash on hand. In the future, the acquisition of new production capacity will ensure the rapid growth of the company's tobacco flake business, providing a driving force for long-term growth. Tobacco flavourings continue to remain stable, and will continue to contribute to stable cash flow in the future: We believe that in the tobacco business, the tobacco industry has entered a period of maturity and stability, and will maintain a slow growth rate in the future. The growth rate is expected to remain within 1%-3%, with stable growth; in the edible essence business, increasing competition within the industry has brought the industry into a period of adjustment, and the company plans to continue to pay attention to the development of upstream natural fragrance ingredients business in the future, using peacock essence's reputation in the industry to strengthen its advantages. In the future, the tobacco and edible essence business will maintain steady growth in low units, contributing to stable cash flow. Highly recommended, with a target price of HK$5.31: Since the growth of the company's tobacco flake business in the first half of fiscal year 2014 exceeded expectations, it is expected that this part of the business will contribute about 1 billion yuan in revenue throughout the year. The impetus for maintaining rapid growth in the future comes from the acquisition of production lines within the industry. The company's tobacco and edible essence business will maintain steady development and will also contribute to stabilizing the cash base. The company's dividend rate has been high over the years, remaining around 40%. It is expected that the dividend rate will remain stable in the future. Referring to the company's history and valuation performance in the same industry, as well as the company's high dividend rate, we maintained the company's PE 9 times in fiscal year 2014, equivalent to the target price of HK$5.31, an increase of 23%, giving it a highly recommended rating.