Incident 1. The company released its 2020 semi-annual report. During the reporting period, it achieved revenue of 6.689 billion yuan, an increase of 19.98% over the previous year, and the net profit of the mother was 356 million yuan, an increase of 1.25% over the previous year. Incident 2. On August 27, the company signed technical joint development agreements in the field of artificial meat with Shenyang Agricultural University and Shenyang Normal University.

Modern agriculture and health food revenue grew rapidly, and the new product+brand+channel model promoted the successful refinement of company performance. In terms of revenue: 1) Other agricultural products sales business, mainly corn, was still the largest source of performance. During the reporting period, the business achieved revenue of 3,572 billion yuan, accounting for 53.39% of total revenue, up 9.11% over the previous year, and the gross profit margin was 1.71%. There were two reasons for the increase. One is due to the impact of the epidemic. Corn prices continued to rise in the first half of the year, reaching the highest level in the past five years; second, due to the impact of the epidemic, corn prices continued to rise in the first half of the year, reaching the highest level in the past five years; second, due to the company's traditional grain industry chain and China's online corn network dominated by newly purchased corn online corn Supply chain advantages collaborate to improve operating efficiency. Among them, the latter was officially launched in February of this year. As of June 30, the total volume of sales was 764,600 tons, with a total turnover of 1,512 billion yuan; 2) The revenue of the agricultural product processing business, which focuses on health food, grew rapidly. Among them, rice processing and sales reached 1,076 billion yuan, an increase of 104.05% over the same period last year, and the gross profit margin was 2.37%, an increase of 1.5pct over the same period last year; the oil and soy products processing and sales business achieved revenue of 1,967 billion yuan, an increase of 68.08% over the previous year, a gross profit margin of 5.96% over the previous year Over the same period, there was an increase of 3.48 pct, of which Yinxiang soy products achieved sales revenue of 62 million yuan, an increase of 28.88% over the previous year. The reason for this sharp increase in the performance of these two categories of products is that, thanks to the expansion of categories, the company added 6 oil products to the original brand rice series products. At the same time, “Tiandidao” Zhaoyuan millet products and “Tianyuandao” flour series products were also listed one after another. In the second half of the year, Yinxiang's high-end tofu series products will also be promoted, put into production, and entered various Haidilao chain stores one after another; second, vigorous brand promotion will be carried out, entering short video communities such as Douyin and Kuaishou online. The subsidiary Oriental Granary also became one of the first 12 service provider companies to enter Minsheng Bank's “Minsheng Farm” service platform; the third is to continue to expand the channel scale. At the end of the reporting period, the company added 196 retail outlets offline, reaching a total of 3608; in terms of net profit: Minsheng Bank's shareholders participated in the company's shares in Minsheng Bank during the reporting period. Achieved net profit of 28.780 billion yuan, Jinzhou Port Of 106 million yuan, the company holds 2.92% and 15.39% of its shares respectively, and the corresponding investment income was 840 million yuan and 16 million yuan respectively. The company's net interest rate for the current period was 5.20%, an increase of 0.26pct over the same period. We believe this is due to the effective promotion of the company's rapid repayment strategy in real estate, combined with the results of vigorous development of its main business, and continued improvement in profitability.

Joint research and development with universities has entered the artificial meat circuit to provide strength for the company's health food business. The company has obtained three patents in the field of basic raw materials for artificial meat in 2012, namely “full-fat stabilized rice bran powder”, “production method for full-fat stabilized rice bran powder”, and “production equipment for full-fat stabilized rice bran powder”. The research direction of this cooperation is for products related to high-moisture plant-based artificial meat. The artificial meat market has great potential, and the company's entry into the artificial meat sector will help build the next performance growth point for its health food business.

Profit Forecast & Investment Suggestions: We expect the company to achieve revenue of 159973/183.15/20.364 billion yuan and net profit of 646/771/918 million yuan in 2020-2022, corresponding to EPS 0.17/0.21/0.25 yuan/share. We are optimistic that the company's agricultural products purchasing and sales business will benefit from the sharp rise in corn volume and price in 2020, the national agricultural product supply chain system will be gradually improved, and the brand rice, noodle oil, health food brand+ channel will be vigorously promoted, and the “buy” rating will be maintained. Risk warning: risk of changes in agricultural product prices/agricultural policies, brand & channel construction falls short of expectations