Key investment points: 2016 results fell 17.36%, and the first quarter of '17 fell 47.42%. In 2016, the company achieved total operating income of 6.237 billion yuan, a year-on-year decrease of 11.49%, and net profit attributable to shareholders of listed companies of 513 million yuan, a year-on-year decrease of 17.36%. Achieve EPS of 0.44 yuan. The company's profit distribution plan is to distribute a cash dividend of 1.00 yuan to all shareholders for every 10 shares based on the company's total share capital of 1,157 million shares. Revenue for the first quarter of '17 was 1,354 billion yuan, down 4.04% year on year, and net profit was 79.6 million yuan, down 47.42% year on year. The industry has had a difficult year. 2016 was a difficult year for the compound fertilizer industry to operate. The overall efficiency of the industry declined due to factors such as falling grain prices, poor demand in the planting industry, and continued sluggish raw material prices. At the same time, preferential policies on taxation, transportation, electricity, and gas use in the compound fertilizer industry have been abolished one after another, environmental inspection efforts have continued to increase, and the operating pressure on compound fertilizer companies has increased sharply. Strengthen brand building. In 2016, the company continued to unswervingly implement the “strong brand enterprise” strategy with the guiding philosophy of “deepening the market foundation, deepening channel transformation, and digging deeper into product potential”. In terms of marketing, the company has ensured the continuous advancement of the company's marketing work through methods such as channel sinking, terminal driving, model leadership, one place, one policy, and intensive channel cultivation. In terms of brand, the company uses “Stanley” and “San'an” as strategic brands, and “Fourth Element” as a high-end sub-brand. Through the classification and combination of brands and products, the company has formed a clear brand plan and product sequence. Agricultural services continue to advance. Facing the severe industry situation in 2016, in order to meet the market demand for high-quality, diverse, and personalized products and services, and seek new profit growth points, agricultural companies signed a cooperation agreement with Dutch Kobert Biosystems Co., Ltd., a world navigator in the agricultural crop pest and biological pollination industry, to launch a new cash crop solution - the “Telly” series, which includes nutritious products, functional products, and bear bee pollination. Strengthen industrial collaboration and enhance the company's overall competitiveness. The company acquired 35% of Anhui Hengji Seed Co., Ltd.'s shares in Anhui Hengji Seed Co., Ltd. with its own capital of RMB 150 million in 2016. Anhui Hengji Seed Co., Ltd. is a modern seed enterprise, mainly engaged in seed cultivation and management. The company's acquisition of part of the shares in Henderson Seed Industry is strategically aimed at further implementing the company's strategic plan, integrating planting industry chain resources, and improving the integrated agricultural service platform. In terms of business, the two sides will jointly promote the brand and share channels, carry out research, development, demonstration and promotion of the “integrated fertilizer” program, and achieve the application of the “Good Seed, Good Fertility” supporting technology, so as to achieve complementary advantages and enhance the company's overall competitiveness. The rating was downgraded to an increase in holdings. We are actively optimistic that the company will benefit from an increase in the compound fertilizer industry's concentration, and the direction of the company's future transformation of agricultural services. We expect the company's EPS to be 0.37, 0.43, and 0.49 yuan in 17-19, giving a 17-year valuation 25 times, and a target price of 9.25 yuan, downgrading it to an “increase in holdings” rating. Risk warning. The risk that downstream compound fertilizer demand falls short of expectations.