Key investment points: Informatization means to solve the four major problems in the agricultural products trading process. The main business of Guannong Co., Ltd. includes lint processing, tomato processing, forest fruit processing, sugar production, etc. It is a leading fruit industry under the Second Agricultural Division of the Corps, and it is also an enterprise that first entered the field of agricultural informatization. In April 2012, Guannong Co., Ltd. formed a joint venture to establish Heyuan Fruit Industry, a subsidiary that specializes in e-commerce for bulk agricultural products in Xinjiang, taking the first step in e-commerce involving agriculture. In 2014, the company established subsidiaries Jiaxing Guannong E-commerce Co., Ltd. and Jiaxing Agricultural Products Auction Co., Ltd. in Jiaxing, Zhejiang. In January of this year, Guannong Co., Ltd. also signed a cooperation agreement with SF Express Heke to enter the O2O field, which is still being explored in the e-commerce model. So far, Guannong Co., Ltd. has formed a high-quality agricultural products sales network in Xinjiang, which includes electronic transactions, auctions, and e-commerce. It aims to solve the four major problems of asymmetric supply and marketing information for agricultural products characteristic of Xinjiang, difficulties in premium prices for high-quality agricultural products, uncertain prices, and high distribution costs through Internet technology. The ideal is reflected in reality, and the company is preparing to build a dried fruit auction center. Earlier, the subsidiary Jiaxing Agricultural Products Auction Company introduced strategic shareholders and achieved management shareholding. Immediately after that, construction of the Korla Xinjiang Bulk Agricultural Products Auction Center and the Hebei Cangzhou Xinjiang Dried Fruit Auction Center has begun, which will officially open after September this year. The former covers an area of about 20,000 square meters, with a target transaction volume of over 8 billion yuan in 2018; the Hebei Cangzhou Auction Center covers an area of about 8,000 square meters. Taking advantage of its own being the largest distribution market for the jujube industry in the north, the transaction volume is expected to exceed 2 billion yuan within 2 years. The company plans to adopt a Dutch-style auction model to build the largest auction trading platform for agricultural products characteristic of Xinjiang in China, reduce circulation costs (about 30-50%), reduce inventory and receivables risks, achieve premiums for high-quality agricultural products, and promote the healthy development of agricultural product circulation. The profit model is clear. There are 4 aspects of the company's profit model: 1) Commissions. On the auction platform, the company charges a transaction commission of 1-3% of the transaction amount for successful transactions; 2) advertising revenue. After the platform's influence expands, relevant advertisements posted on auction halls, websites, and promotional materials can bring sideline revenue to the company; 3) Financial services. The trading platform adopts a membership system. Through cooperation with banks and qualified third party payment institutions at the business and equity levels, the company can obtain interest spread income for margin absorption. After the transaction scale is expanded, it can also collect handling fees through transaction settlement; 4) Information database revenue. A large amount of auction transaction data can be developed into a database to generate revenue for industry insiders for a fee. The company's core competitiveness is reflected in four aspects: 1) Regional resource advantages. The unique geographical and climatic resources of the Xinjiang region make it an important production area for forest fruits and dried fruits in China, with high yield, excellent quality, and low pollution; 2) The Corps is expected to provide exclusive support. The Corps has obvious advantages in large-scale and intensive cultivation in agriculture, and endorses the quality of the products distributed by the company; on the other hand, the Corps reform is underway, and Guannong Co., Ltd. is expected to become a resource integration platform for the forest fruit business under the Corps. Currently, the company only has forest fruit resources from the Second Agricultural Division. In the future, there is an opportunity to integrate the Corps's forest fruit resources; 3) Talent specialization. The auction platform subsidiary invited Mr. Zhang Maolin, a professional in the field of agricultural product logistics, to actually operate and invest in shares. Other participating partners also have rich experience in agricultural product logistics, transaction settlement, etc.; 4) Location policy advantages. “Belt and Road” enables specialty agricultural products from Xinjiang and Central Asia to connect more quickly with European and Chinese (overseas) consumer markets at a lower cost. Investment advice: first coverage, “increased holdings” rating! While agricultural product auctions and e-commerce became the highlights of the company's later development, benefiting from rising sugar prices, potash fertilizer prices, and optimization of the tomato product structure, the company's other main businesses also showed signs of improvement to varying degrees. In 15-17, the company's revenue is estimated to be 13.79/23.36/4,043 billion yuan, and net profit is 1.93/3.37/516 million yuan respectively, corresponding to earnings of 0.25/0.43/0.66 yuan per share, and a price-earnings ratio of 78/45/30 times. In the later stages, the company's new business had many highlights, and the original main business was also likely to exceed expectations, giving it an increase in holdings rating. Catalysts: The company integrates resources in the field of agricultural informatization upstream and downstream, the company integrates resources within the Corps system, launches employee stock ownership plans, the company continues to build auction centers, and the increase in sugar prices exceeds expectations.