Event: On February 27, the company released its 2016 performance report. During the reporting period, the company achieved revenue of 3,052 billion yuan, an increase of 11.92% over the previous year; net profit of 79.5934 million yuan, an increase of 132.76% over the previous year. According to the Express Report, the company achieved net profit of 477.609 million yuan in the fourth quarter, an increase of 89.95% over the previous month and an increase of 119.39% over the previous year. Our analysis and judgment: 1. Improved marine resource conditions drive output growth, continuous improvement of channel layout, and significant increase in profitability. In 2016, the company underwent a comprehensive transformation. 1) By divesting 790,000 mu of unsuitable sowing area, the company achieved a shift from large-scale to focusing on the quality and efficiency of the unit's output rate. 2) Promote the upgrading of the marine ranching industry, cultivate high-quality marine treasure seedlings, accelerate the market-based transformation of the seed industry, and at the same time increase the proportion of self-grown seedlings and control the unit cost of seedlings. 3) The company integrates industrial chain resources, implements the “resources+channel+brand” strategy, and enters the first camp of international fishery. The company has established a dual brand cooperation with the leading snack food brand “Liangpin Store”. 4) Strictly control costs and expenses, strengthen the control of seed fees and marine usage fees, reduce labor costs, and improve internal organizational structure and operational efficiency. The company expects salary costs to be reduced by about 7% in 2016 (without audit), and period expenses by about 18%. Under the implementation of a series of transformation measures, the company's operating income increased steadily during the reporting period. At the same time, the aquaculture industry's gross margin also rebounded, and net profit significantly reversed losses year-on-year. Furthermore, the company continues to expand overseas markets and improve order capacity, and the scale of products sold to Europe, America, Japan, and South Korea continues to expand, driving a significant increase in profitability. 2. Focus on main business and optimize industrial layout. Through the transfer of assets such as passenger transportation and tourism, the company further focuses on the marine food business, enhances the company's asset liquidity, increases the company's net assets, and enhances its solvency. According to the company announcement, as of December 31, 2016, the valuation value of the company's asset transfer transactions is 63,5589 million yuan, and it is estimated that 41.137 million yuan will be included in current profit and loss, and the remaining 22.4219 million yuan will be included in capital reserves. The amount included in current profit and loss is expected to increase by 28.2472 million yuan over the amount reported for the third quarter of 2016. 3. Introduce war investment to welcome new development. The controlling shareholder signed a “Share Transfer Agreement” with Shanghai Hexiang on June 5, 2016, to transfer 35.55 million shares - 106.66 million shares (about 5% to 15% of the total share capital of Zhangzidao) held by them to Shanghai and Xiang or the designated parties of both parties. The company's introduction of war investment will make full use of the company's technical resource advantages and the management advantages of war investment to improve the company's management efficiency. Investment suggestions: The company's operations are adjusted, and performance is turning a loss into a profit. Removing the cap is imminent; introducing war investment to welcome new development. Net profit is expected to be 0.8/16/210 million in 16-18, maintaining the “buy” rating. Risk warning: Product sales fall short of expectations.