From January to December 2012, the company achieved operating income of 705 million yuan, a year-on-year increase of 45.52%, operating profit of 1.83 million yuan, a year-on-year decrease of 131.24%, net profit attributable to the parent company of 18.98 million yuan, a year-on-year decrease of 133.31%, and earnings per share of -0.077 yuan. Among them, in the fourth quarter, the company achieved operating income of 265 million yuan, a year-on-year increase of 91.34%, operating profit of 49.59 million yuan, a year-on-year decrease of 766.17%, net profit attributable to the parent company of -51.09 million yuan, a year-on-year decrease of 1505.41%, and earnings per share of -0.21 yuan. The slump in pig prices led to losses throughout the year. The company is an animal husbandry enterprise focusing on pig production and sales. It is mainly engaged in the production and sale of breeding pigs, piglets, fattening pigs, and feed. During the reporting period, the company listed 354,800 pigs, an increase of 45.95% over the previous year, including 158,800 fattening pigs, an increase of 39.08% over the previous year, 140,800 young pigs, an increase of 91.83% over the previous year, and 56,000 breeding pigs, maintaining the level of the previous year; annual sales of 7,819.06 tons of meat products, an increase of 1,081.36% over the previous year; and annual sales of 16,015 tons of feed, a decrease of 8.24% over the previous year. Product sales increased after the company expanded in size, but the continued decline in pig prices had an adverse impact on the company's net profit, and the price of feed raw materials rose sharply. The company's comprehensive gross margin during the reporting period was 6.03%, down 9.04 percentage points from the previous year. Pig prices have entered a deep loss range. The company is mainly engaged in safe and high-quality pig breeding and trade, and pork slaughter and processing. At present, pig farming has entered a period of deep loss. As of April 24, pig prices had fallen to 11.92 yuan/kg. The ratio of pig food and pig feed fell below the balance point one after another and continued to decline. They were 3.58 and 5.02 respectively. The average profit for self-breeding and self-breeding of pigs was -246 yuan. The government began storage work on April 7, but judging from the historical storage situation, storage did not clearly drive a rebound in pig prices. The pig base was too large, and the storage effect was limited. The loss period for this round may be lengthened. Through the comparison of this round of pig cycles with the previous round, it was discovered that the speed at which pig prices were bottomed out in this round was significantly faster than in the previous round. The loss range for the last round of pig breeding was from February to July 2010. It is estimated that the loss range for this round of pig breeding may be lengthened. The main reason for this round is the lag in eliminating sows that can breed, while the main reason for the lag in eliminating sows that can breed is mainly due to the decline in feed prices in the second half of 2012 and the recovery in pork consumption, which led to a rapid rebound in the average profit of pig farming after reaching a break-even point, thus affecting the sow elimination process. According to data from the Ministry of Agriculture, in February, the national pig inventory fell 1.3% year on year, and the breeding stock of sows increased 3.9% year on year. In the previous cycle, after breeding entered a period of loss, breeding sows had already entered the elimination process. Overall pig prices were low in 2013. Profit depends on the strength of the pig price rebound in the second half of the year. We believe that at present, pig stocks are still at a high level, and pig prices still have room to fall. The lag in the elimination of sows that can breed may lengthen the loss range in breeding. It is expected that the pig cycle will come to a bottom in the middle of this year. There are many uncertainties affecting pig prices. In the second half of the year, we will actively pay attention to signs of reversal in pig prices, and investment opportunities in pig breeding will gradually become clear. The pig breeding industry is expected to lose money across the board in the first half of the year, and profits rebound in the second half of the year, but from a full-year perspective, whether 2013 is profitable depends on the strength of the rebound in pig prices in the second half of the year. Earnings forecasts and investment ratings. Earnings per share for 2013, 2014, and 2015 are estimated to be 0.004 yuan, 0.25 yuan, and 0.41 yuan respectively. Based on the closing price of 7.25 yuan on the previous trading day, the corresponding dynamic price-earnings ratios are 1,693 times, 30 times, and 18 times, respectively. Considering that pig prices are still in a period of deep loss, the company's “neutral” investment rating is maintained. Risk warning: (1) pig prices continue to fall; (2) the outbreak of the epidemic