The company's imported pork inventory has increased. Taking advantage of pork price differences at home and abroad, the negative impact of poor imports and swings in pig prices can be effectively smoothed out, further releasing profit elasticity. After the outbreak of the epidemic overseas, consumer demand for pork in European countries declined, so pork export prices to China declined somewhat. Currently, US export prices are in a stable trend, which is beneficial to domestic pork importers. According to data from the Ministry of Commerce, the amount of pork and by-products imported domestically from most European and American countries increased exponentially in mid-March. Pyramid Ham has built its own 60,000 tons of cold storage. As of 1H19, the company has imported more than 5,000 tons of meat ingredients. Since then, the inventory of imported raw materials has continued to increase. We expect the current imported raw materials to be around 20,000 tons. While meeting our own production, it can also meet strong domestic demand. On the one hand, the company replaces all domestic pork ingredients with pork imported from abroad, which can effectively control the cost of raw materials. On the other hand, if domestic pork prices rise in the future, low-price inventories will help the imported brand meat business contribute to performance elasticity and further increase profit margins. The specific impact of the pandemic has been transformed into new opportunities, amplifying the company's strengths. Affected by the epidemic, the proportion of people who eat at home has increased. Premium ham products meet the cooking needs of families in the kitchen and will benefit from this. Prepared meat products have performed well in the supply chain in the takeout scenario, and their advantages will be amplified this year. In 1Q20, the company tested products such as pork ribs, etc., and sales were optimistic. It will continue to launch new products and channel development in the future. According to the company's forecast, 1Q20 is expected to achieve a profit of 45-55 million yuan, a year-on-year increase of 41.2% to 72.5%. Long-term outlook, the company's business development ideas are clear, and there is considerable potential for growth. 1. Prepared meat products meet both household and catering needs. The market base is good, and production is imminent. The company's accumulated technical processing level of meat products and product control capabilities will also help improve gross margin. On the one hand, the company has invested more than 20 years in meat product development and processing technology, and the prepared meat products it provides have a good flavor. On the other hand, in the long run, the rise of central kitchens and the trend of family dining have laid the foundation for the rapid growth of the prepared meat products market. (2) The traditional meat products industry is developing online, with ham as the main line, and has built a more complete product matrix, covering products such as sausage, meat sauce, bacon, sausage, etc., and is also working online to cooperate with various e-commerce platforms to dynamically track new retail styles. (3) Plant-based meat products are expected to integrate consumption scenarios and become new growth points. Currently, plant-based meat products focus on mixed meat to welcome the blue ocean of the market under the new demand for healthy nutrition. Profit forecasting and investment recommendations: Considering the pandemic, the company can make full use of the advantages of inventory and its own freezers, enhance defense capabilities, improve the certainty of performance, and superimpose the blue ocean of the meat products industry and the artificial meat industry. We expect the company's revenue in 20-21 to be 770 million yuan and 1.28 billion yuan respectively, net profit of 180 million yuan and 280 million yuan respectively, EPS of 0.18 and 0.29 yuan respectively, and corresponding PE of 32 and 20X respectively. The company focuses on the main meat products business and will enter a period of accelerated performance development. The net profit growth rate is expected to be faster than comparable companies, and it can enjoy a certain valuation premium. We have given PE 50 times in 2020, the corresponding target price is 0.9 yuan, the corresponding market value is 8.9 billion yuan, and the corresponding market value is 8.9 billion yuan, maintaining the “recommended” rating. Risk warning: trade friction, pork purchase prices fluctuate greatly, new product sales fall short of expectations, slow channel development, loss of asset impairment, food safety issues, etc.