The development strategy for the three-stage rocket was established. The ideas were clear and thorough, and the results were initially visible. In '18, the company's business returned to the path of meat products. After management personnel adjustments, the company clarified the development strategy of the three-tier rocket: 1. Rapidly develop ham and specialty meat products as the company's basic business and continuously improve the brand premium capacity; 2. Vigorously develop imported brand meat and prepared meat products as new business for the company; 3. Continue to cultivate the meat industry's Internet and plant-based meat business as the company's future business. 1H19's share of revenue in the ham industry increased from 44.9% in the same period to 84.7%, and net profit to mother increased 582.8% over the same period; 1Q20 net profit is expected to increase by 41%-73% year on year, and the adjustment effect is beginning to bear fruit. Growth highlights: Prepared meat products+traditional meat products+plant-based meat go hand in hand to expand channels, develop online, and enhance brand influence. The business needs to be scaled up urgently, and the price difference of imported pigs contributes to profit flexibility. 1. The prepared meat products industry has broad space, and the 1Q20 company tested the waters successfully. With the transformation of household consumption concepts and the rise of central kitchens, the prepared meat products industry has entered new opportunities for development, and there is broad scope for the future. The 1Q20 company is testing products such as pork ribs, etc., and sales are optimistic. In the future, it will continue to launch new products and channel development, and the release of prepared meat products is imminent. 2. The traditional meat product line continues to be upgraded and enriched, and efforts are made online to build an industrial Internet brand. Based on traditional ham, the company continues to launch sausage, sauce, bacon, sausage, light cured meat, casual meat products, etc., to enrich the product line structure. At the same time, it is developing online. Currently, there are 160 cooperative e-commerce customers of all kinds, and will continue to optimize in-depth cooperation with platform e-commerce, social e-commerce, live e-commerce, content e-commerce, and fresh e-commerce. 3. Be the first to enter the blue ocean of plant-based meat, cultivate the market, and have a first-mover advantage. In October 2019, “Golden Plant Meatloaf” was launched in Taobao flagship stores. Currently, 3 plant-based meat related products are on the shelves. The company will continue to develop, focusing on mixed meat. In the future, it will enrich products such as plant-based meatballs, plant-based lion heads, vegetable sausage, etc., while also developing market channels to strengthen publicity and promotion, which will become a new growth point in the future. 4. Lay out imported pork, enjoy the pig price difference dividend, and increase profit flexibility. In October '18, the company used all imported pork ingredients. Product costs were drastically reduced, and gross profit levels improved markedly. The company has 60,000 tons of cold storage. Through cooperation with pork suppliers around the world, such as Europe and the US, the company imports high-quality pork from abroad, and the supply of raw materials is sufficient. Profit forecasting and investment advice. The company focuses on the meat products business, making efforts to prepare meat products, specialty meat products, etc. Currently, the company's brand influence has increased, management and fundamentals have improved dramatically compared to the past, and will enter a period of rapid performance development in recent years. We expect the company's revenue for 20-21 to be 770 million yuan and 1.28 billion yuan respectively, net profit to mother of 180 million yuan and 280 million yuan respectively, EPS of 0.18 and 0.29 yuan respectively, and corresponding PE of 34 and 21X respectively. Considering the compound growth rate of the prepared meat products industry and the artificial meat industry over the next three years, the company will enjoy industry dividends. At the same time, the company's fundamentals have improved significantly compared to the past, and performance growth has begun to accelerate. The net profit growth rate is expected to be faster than that of comparable companies, and they can enjoy a certain valuation premium. We are giving 2020 PE 50 times, a corresponding target price of 9.0 yuan, and a corresponding market value of 8.9 billion yuan. For the first time, coverage was given a “recommended” rating. Risk warning: trade frictions, large fluctuations in pork procurement prices, new product sales falling short of expectations, slow channel development, loss of asset impairment, food safety issues, etc.