Core idea The JD flagship store launched 3 new products, all of which are prepared meat products, namely “10 degrees fresh” low temperature sausage, pork ribs, and light salted meat. The product has two major features: 1. Prepared meat products are easy to process to meet the convenient needs of the family table. 2. Mainly kept fresh at 10 degrees Celsius, simulating natural air drying at 10 degrees Celsius, creating a “fresh” taste. With the full development of e-commerce channels, online business is expected to achieve rapid growth. The company's online sales volume in 2019 was 75.5946 million yuan, a year-on-year increase of 44.24% over the previous year. On the basis of existing online channels, the systematic development of live streaming of influencers, fresh e-commerce, content e-commerce, and social e-commerce is expected to create a three-dimensional online network. 1. Broader coverage & marketable. The company will expand cooperation with new retail platforms, establish a new marketing network with wider coverage, and cooperate and distribute with platforms suitable for the different characteristics of different products. 2. Head & waist anchors work in parallel. The company will establish a brand image and enhance its popularity through cooperation with leading live streaming agencies and platforms. By exploring potential live streaming, establish a live streaming network, and set up live streaming channels on both channels in parallel. 3. Launch products with a high online repurchase rate to enhance consumer stickiness. According to the needs of consumers at different levels and ages, it is expected that user profiles will be gradually depicted, product development will be closely integrated with new retail and e-commerce platforms, and products with high consumption frequency and repurchase rate will be launched. Future growth highlights: specialty meat products+prepared meat products+imported brand meat are expected to grow rapidly, ham is growing steadily, and the blue ocean of plant-based meat has a first-mover advantage. 1. Special meat products. Specialty meat products such as sausages, bacon, sauce, and bacon have a short production cycle, high consumption frequency, and increased profit levels. Among them, spicy sausage is represented by the company's popular product. The product has distinctive features and outstanding advantages. 2. Prepare meat products. Embrace the new trend of household consumption with the new trend of changing consumption. The new product is on the JD. The product is convenient and convenient, and it is expected to be released in large quantities. 3. Imported brand meat. Importing high-quality pork from abroad, using refined segmentation, and equipped with platforms such as fresh e-commerce and community e-commerce, it is expected to achieve a high-quality brand effect. 4. Plant-based meat is clearly positioned in terms of products, and it is expected that more new products adapted to the tastes of the country will be launched. It has a cost advantage and increases profit flexibility. As of April 22, 2020, the company had 8887.55 tons of imported pork in stock, with 10,397.45 tons in transit, for a total of 19,285 tons, providing sufficient raw material guarantees for production today and next. Raw material stocks are sufficient, foreign procurement channels are smooth, and procurement costs are relatively manageable. Profit forecast and investment advice: Prepared meat products are loaded with new household consumption trends and are expected to expand. The company's specialty meat products+prepared meat products+imported brand meat is expected to grow rapidly. Ham is growing steadily, and the blue ocean of plant-based meat has a first-mover advantage, and the growth prospects are clear. We expect to enter a period of rapid performance development in recent years. We expect the company's 20-22 revenue to be 7.7, 12.8 billion yuan, and 1.82 billion yuan, net profit of 180, 3.2, and 4.6 billion yuan, EPS of 0.18, 0.33, and 0.47 yuan respectively, and the corresponding PE is 36, 20, and 14X, respectively. Considering the rapid development of the company's prepared meat products industry and artificial meat industry, the profit advantage of the price difference between branded meat and pork is superimposed. Net profit is expected to grow faster than comparable companies, and can enjoy a certain valuation premium. We give 2020 PE 50 times, a corresponding target price of 9 yuan, and a corresponding market value of 9 billion yuan, giving it 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.