Key investment events: The company had revenue of 2,889 billion yuan (+62.14%) in the 1-3 quarter, net profit of 49 million yuan (-46.85%), net profit of 49 million yuan (-46.85%), revenue of 1.24 billion yuan (+70.38%) in the third quarter, and net profit of 32 million yuan (+33.57%). The company expects net profit of 0.6-100 million yuan (-34.41% ~ 9.32%) in 2017. Also, driving a sharp increase in revenue, the price of duck seedlings bottomed out and rebounded, and profit improved markedly. This year, the company also listed 8 subsidiaries, including Huaying Xintang and Huaying Shunchang. Various production indicators jumped, driving a sharp increase in revenue. Duck fry bottomed out in the third quarter and rebounded, with an average price of 2.99 yuan/feather, a sharp increase from the average price of 0.96 yuan/feather in the second quarter. The epidemic in the first half of the year accelerated the clearance of production capacity in the industry. Coupled with the peak season in the third quarter, the profit of the frozen duck business also improved markedly. Since this year, the price of duck down has been strong, and the profit of the down feather business has been stable. Also, the trend of food products such as duck blood, which the company focuses on cultivating is good. 3. Fees continue to decline, and operating efficiency continues to improve. In recent years, the company has continued to strengthen production process control, and has been quite effective in improving efficiency and reducing fees. The Q1-3 rate was 6.71%, down 1.68 percentage points from the previous year. Although the apparent three-fee increase was 44 million, considering the impact of the merger, we believe that the company's operating efficiency continues to improve. Horizontal and vertical expansion is accelerating, and mergers and acquisitions are expected to continue to be implemented. The company accelerated expansion around the entire meat duck industry chain. A number of new joint venture subsidiaries were set up in the third quarter. The subsidiary Huaying Xintang plans to invest 550 million yuan to build a new feather processing project to further increase the production capacity of the high-margin down business. In addition, the company initiated the establishment of a 700 million yuan equity investment fund, which is mainly invested in large-scale farms. It is expected that later mergers and acquisitions will continue to be implemented. The company's industrial layout continues to widen and deepen, and MBO is also the direction of the company's continuous efforts. Investment suggestion: The company is the only company with A-shares for meat ducks. Environmental abstinence is expected to accelerate the removal of industry production capacity, and duck prices are bullish. The company's efficiency continues to improve, and the industrial chain layout is gradually improving. Furthermore, the company's mixed reform is progressing steadily. We expect net profit for 2017-2019 to be: 80 million yuan, 180 million yuan, and 210 million yuan respectively, corresponding to PE: 82 times, 38 times, and 33 times, respectively, maintaining the “increased holdings” rating. Risk warning: pandemic factors; prices fluctuate sharply.