Incident: Jinfeng Commune, a holding subsidiary of the company, and Zhengda Han Ding Modern Agricultural Technology Co., Ltd. signed a strategic cooperation agreement on July 26 to jointly establish an operating company, invest and operate livestock and poultry waste resource utilization projects, and further cultivate the three agricultural fields. Once again, it has joined forces with Chia Tai Group. Chia Da Han Ding is a wholly-owned subsidiary of Chia Tai Group in China. The Chia Da Group has a complete modern agricultural and animal husbandry industry chain, has set up more than 400 domestic enterprises, and has a total investment of over 120 billion yuan. The registered capital of the joint venture is 100 million yuan, of which Zhengda Han Ding, Jinfeng Commune, and management and management teams account for 40%, 40%, and 20% respectively. At present, livestock and poultry farming waste utilization levels are low, and surface source pollution is serious. In line with the trend of chemical fertilizer reduction and efficiency, the Ministry of Agriculture and Rural Affairs just issued an organic fertilizer subsidy policy in early July; Jinfeng Commune signed a 400,000 ton corn order with Zhengda in April '18. The resource utilization project can process chicken manure into organic fertilizer, and help farmers grow higher quality agricultural products, forming a closed loop in the agricultural and animal husbandry dual industry chain, greatly reducing livestock and poultry waste treatment costs and reducing agricultural surface source pollution. Organic fertilizer will become a new profit growth point for the Jinfeng Commune. The joint venture will build an organic fertilizer processing plant to support Chia Tai Group's domestic farm. It is estimated that the future production capacity will reach 3 million tons. Conservatively estimated with a net profit of 150 yuan per ton, it will contribute 450 million yuan in profit, which will become an important new profit growth point for Jinfeng Commune in the future. Jinfeng Commune has established 99 county-level communes, spread across nearly 20 provinces across the country, serving nearly 2 million mu of land, which can help farmers reduce planting costs by 12% and comprehensive benefits by more than 20%. In the next five years, Jinfeng Commune will build 1,000 county-level communes to serve 50 million farmers. This in-depth cooperation will further reduce trusteeship costs, reshape agricultural marketing models, and accelerate the implementation of rural revitalization strategies. Maintain a “buy” rating. It is estimated that the company's EPS in 18-20 will be 0.38 yuan, 0.51 yuan, and 0.66 yuan, respectively, and the corresponding PE will be 19 times, 14 times, and 11 times, respectively. The company's compound fertilizer business bottomed out and recovered, and Qindu No. 1 sales volume grew rapidly. The benefits of Jinfeng Commune's further in-depth cooperation with Chia Tai Group will accelerate expansion. Maintain a “buy” rating. Risk warning: The risk that the progress of Jinfeng Commune falls short of expectations.