Building a comprehensive service provider for the pig industry The company is committed to building a comprehensive service provider for the pig industry. Currently, its main business has covered feed, pig breeding, animal protection and veterinary medicine, and Internet communication technology businesses. The revenue share of the four business categories in the first half of 2018 was: 79.84%, 13.2%, 4.94% and 1.83%, respectively. Among them, feed is a traditional dominant business; farming is the main driving force for performance growth; and animal insurance and Internet businesses can increase the added value of products. The upward swine fever cycle has led to a trend reversal in the supply and demand pattern, and pig prices have entered an upward channel. Looking at the growth cycle, pig storage in the second half of '18 will affect pork supply in the first half of '19, while the impact of sow production capacity removal will begin to be reflected in the second half of '19. The overall situation of swine fever and the embargo to drive piglets and sows capable of breeding to remove production capacity has been determined. The certainty of a sharp rise in pig prices in the second half of '19 is relatively high, and the industry is expected to make huge profits in 2020. Pig production capacity was rapidly released, and the company took advantage of the momentum. Since 2016, the company has vigorously expanded pig production capacity through internal and external integration. 1) Outreach: Mergers and acquisitions of Wuhan Tianchong, Fujian Yichun, etc., and participation in Xinda Animal Husbandry and Jiahe Animal Husbandry; saved pig breeding and piglet production capacity for the company's subsequent development; 2) Endogenesis: successively prepared projects such as the Nanping Ecological Pig Breeding Project (phase I production capacity 360,000 heads) and the Tieli Ecological Pig Breeding Industry Project (400,000 heads in the first phase). We estimate that the effective listing volume of the company in 2018-2020 (consolidated table) will be 250,000, 450,000, and 960,000 shares (the number of shares converted to equity shares is 220,000, 400,000 and 890,000, respectively); the number of equity listings obtained through equity participation is 220,000, 260,000 and 320,000, respectively; and the total equity listings are 440,000, 660,000, and 1.21 million, respectively. Combined with the impact of the pig industry entering an upward cycle, the company's breeding business profits are expected to grow rapidly from 2019. Be optimistic about the company and give a “buy” rating. We expect the company's EPS for 2018-2020 to be -0.75 yuan, 0.64 yuan, and 2.35 yuan, respectively. Referring to comparable company valuations, we gave the company 25 times PE in 2019, and the corresponding target price was 16.00 yuan. The company is committed to building a comprehensive service provider for the pig industry, where feed, breeding, animal insurance and other businesses develop collaboratively. The rapid release of pig production capacity is combined with the recovery of the industry, promoting high growth in the company's performance. Optimistic about the company, and for the first time, coverage gave the company a “buy” rating. Risk warning: risk of infection with the epidemic, risk of falling product prices, risk of production capacity not being released as expected, risk of impairment of goodwill.