Incident 1: On October 24, the company released its report for the third quarter of 2017: the first three quarters achieved operating income of 2,889 million yuan, a year-on-year increase of 62.14%, achieved net profit attributable to the parent company's owners, a year-on-year decrease of 46.85%, EPS 0.09 yuan/share, a year-on-year decrease of 46.84%; the third quarter achieved operating income of 1,240 million yuan, up 70.38% year-on-year, achieving net profit attributable to owners of the parent company of 32 million yuan, year-on-year increase of 33.57%, EPS 0.06 yuan/share, YoY An increase of 33.63%. Incident 2: Expected operating performance in 2017: Net profit attributable to shareholders of listed companies in 2017 ranged from 60 million to 100 million, with a change of -34.41% to 9.32%. Our analysis and judgment: 1. Duck meat prices are expected to remain high, and the company's performance is expected to reach an inflection point affected by the recovery of the industry. The company's performance in the third quarter increased by 33.57%. The duck industry chain has been sluggish for many years. Consumption of meat duck by-product terminals continued to improve in '17, compounded by factors such as high temperatures in the third quarter and environmentally friendly demolition (environmental protection ban and demolition actions are still being carried out rapidly, and Xintai, Ningyang and other places in Tai'an, Shandong have successively designated prohibited areas), the supply of fur ducks continued to be tight, and the prices of duck seedlings, ducks, and terminals began to rise. The price of duck seedlings has fluctuated at a high level since August. Duck prices are expected to remain high in the fourth quarter, and the company's performance is expected to reach an inflection point. 2. The gradual expansion of production capacity in the down business is expected to contribute to the signing of the “Investment Promotion Contract” and supplementary agreement with the Huangchuan County People's Government on August 10, '17. Huaying Xintang plans to invest 550 million yuan to build a new “Huaying Xintang Feather Processing Project” in Huangchuan County. Huaying Xintang is a holding subsidiary of the company. The company holds 51% of its shares, and Hangzhou Xiaoshan Xintang Down Co., Ltd. holds 49% of its shares. Project construction content: The main products are down and wool; production capacity: 30,000 tons/year; construction of feather processing workshops, storage facilities, etc. The total investment of the project is 55 million yuan, of which 23 million yuan is invested in fixed assets. Company announcement: The Huaying Xintang feather processing project is expected to achieve revenue of 1 billion yuan/year and profit of 50 million yuan/year. In the future, with the gradual implementation of the Huaying Xintang feather processing project, the down business is expected to contribute to high profits. 3. Establish an industrial fund to continue mergers and acquisitions and accelerate the layout of the entire industry chain. Through acquisitions and new establishments, the company expanded downstream business, covering businesses such as food, down, and financial leasing. In 2016, the company established its subsidiary Huaying Biotechnology Co., Ltd., which specializes in the production and sale of duck blood products. In the same year, it achieved revenue of 15 million yuan, net profit of 1.66 million yuan, and a net interest rate of 11%. The duck blood business is expected to grow rapidly and become a new profit growth point for the company. The establishment of Huaying Shenghe Modern Agricultural Industry Phase I Equity Investment Fund partnership will effectively increase the company's M&A project reserves, improve M&A efficiency, and achieve the company's own strategic goals of merger and acquisition expansion and industrial integration through optimal integration of resources and Dingli Shenghe's rich experience and professional capabilities in the field of equity investment. Investment advice: Buy-A investment rating, 6-month target price of 14.5 yuan. We expect the company's revenue growth rates from 2017 to 2019 to be 9.3%, 15.3%, and 19.9%, respectively, with net profit of 1.00, 2.01, and 307 million yuan respectively, and net profit growth rates of 9.5%, 100.8%, and 52.7% respectively, giving it a buy-A investment rating. Risk warning: The rise in the price of duck seedlings falls short of expectations, the risk of diseases such as bird flu, etc., and the progress of the project is lower than expected