Guide to this report: At a time when the duck industry is currently booming, the company, as the “king of the duck in the world”, will fully benefit from the increase in industry prosperity. At the same time, with the deepening of the company's state-owned enterprise reform, the company's efficiency improvement has entered the fast track. Now is the right time to lay out Huaying. Key points of investment: First coverage, “increased holdings” rating. We expect the company's EPS for 18-20 to be $0.38, $0.53, and $0.60. We believe that the duck chain boom has fully recovered, and the duck seedlings, frozen duck, and duck feather businesses will drive the company's rapid performance growth in 2018. However, as the reform of state-owned enterprises continues to deepen, improvements in the company's internal governance have significantly improved the company's operating efficiency and opened up flexible space for medium- to long-term performance. Based on this, after comparing the two valuation methods, the higher target price of 10.21 yuan was taken and the “increase in holdings” rating was given. This year is a big year for duck farming, and the “World Duck King” directly benefits. Affected by price increases for environmental protection and related substitutes, and due to the withdrawal of production capacity due to industry losses after 2011, duck prices have entered a period of recovery. We judge that this round of duck price recovery will continue until at least 2019, driving explosive growth in single-wing profits. As the “king of ducks in the world”, while prices are rising, the company's production continues to rise. With the investment of production capacity in the company headquarters, Kaifeng, Shangqiu and other places, the company's commercial substitute breeding chain is expected to grow by 30 million birds in 2018. At the same time, as high-quality new production capacity continues to be implemented at this year's headquarters, Xincai and other places, it will effectively break through future bottlenecks in the company's commercial duck breeding, boost the company's breeding volume, and enjoy a profitable year. Duck feathers are another important point of interest in the company's performance. Due to shrinking duck production and rising prices for cotton substitutes, etc., the price of down has also soared. At the same time, as the company's meat duck slaughter volume increases, the company is expected to produce 83,000 and 11,000 tons of raw wool in 18-19, and the duck feather business alone is expected to contribute 100% + growth in performance. The company's state-owned enterprise reform continues to deepen, and operating efficiency has been significantly improved, opening up flexible room for future performance. Internally, the company has adopted a flexible management system, relaxed recruitment restrictions on subsidiaries, and introduced more social talents; the incentive system has also been reformed to implement rewards and punishments through the implementation of a security deposit system and an excess reward system to increase employee motivation. Externally, the company has strengthened dealer control and adopted a dealer shareholding system to motivate dealers. Improving efficiency will open up flexible space for medium- to long-term performance. Risk warning: The risk of the epidemic and the rise in duck prices fell short of expectations.