Incident: In 2010, the company achieved operating income of 2,961 billion yuan, a year-on-year increase of 118.51%, operating profit of 145 million yuan, a year-on-year decrease of 20.83%, and net profit attributable to the parent company of 284 million yuan, an increase of 43.97% over the previous year, and achieved earnings of 0.17 yuan per share, exceeding our expectations. In the first quarter of 2011, the company achieved operating income of 584 million yuan, a year-on-year increase of 77.04%, operating profit of 0.72 million yuan, an increase of 120.74%, and net profit attributable to the parent company of 108 million yuan, an increase of 109.2% over the previous year, and achieved earnings of 0.07 yuan per share. The study concluded that in 2010, the company's grain business was already profitable, and sufficient grain stocks supported the outbreak of the grain and oil business. The reason why the company's performance in 2010 exceeded our expectations was that the revenue and profit of the grain and oil business exceeded our expectations, and the return on investment exceeded our expectations. During the reporting period, the company's grain and oil business revenue was 1,485 billion yuan, accounting for more than 50% of revenue, achieving net profit of 2.21 million yuan. The company has already become an agricultural enterprise. In 2010, the company's grain and oil business revenue was mainly concentrated in grain trade, so the gross margin was only 3%. We expect that with the development of the company's high-end rice business this year, the gross margin of the company's grain and oil business is expected to rise sharply. At the same time, we noticed that the company's inventory volume in the first quarter was 1.69 billion yuan, an increase of 467.5% over the previous year. The vast majority of it was raw grain, which provided support for the company's explosion in the grain and oil business this year. Oriental Homeland: Still seriously losing money. In 2010, Dongfangjiayuan's building materials business achieved revenue of 1.21 billion yuan. Although gross margin rebounded, Dongfangjiayuan still had a serious loss of 169 million due to strategic transformation and high costs. This, together with the parent company's increase in expenses, led to a decline in the company's operating profit. At present, most Dongfangjiayuan stores have already introduced strategic partners. In the early stages, the company has sold part of Dongfangjiayuan's shares to reduce the impact of its losses on the company. In the next few years, we expect that the company will gradually phase out of Dongfangjiayuan, and may eventually remove Dongfangjiayuan from the consolidated statement (currently, since the company holds a majority of seats on the board of directors of Dongfangjiayuan subsidiaries, it is still included in the consolidated report), which will provide more room for the company to increase profits. Minsheng Bank and Jinzhou Port are the company's margin of safety. During the reporting period, the company achieved investment income of 646 million yuan. Before the agricultural sector explodes, the company's profits will still depend on investment income from Minsheng Bank and Jinzhou Port, which brings a certain margin of safety to the company's stock price. Branded rice: Large-scale channel development is underway, and procurement of raw grain continues. We have learned that the company has signed contracts with many major channel providers such as Carrefour and Tesco, and will then distribute goods on a large scale. We estimate that delivery will be completed by the end of May to the beginning of June. The entire delivery process fell slightly short of our expectations. In terms of upstream raw material purchases, since the purchase price of rice flowers was high last year, and grain merchants such as COFCO and Yihai were extremely cautious about purchasing rice flower incense this year, so farmers had far more backlog of rice flowers than in previous years. Currently, the price of rice flower incense has dropped from 2.2 yuan/kg at the end of last year to 1.6 yuan/kg, which is comparable to the price of some long-grain incense. The company is also buying rice flowers on a large scale in the Wuchang region. We believe that increasing the acquisition of rice flowers at this time will help increase the company's further control over raw grains and lay the foundation for sales of branded rice this year. Profit forecasts and risk tips. We maintain the company's profit forecast of 0.32 yuan and 0.52 yuan for 2011 and 2012, and maintain the company's “gain” rating. Risk warning: 1) disastrous weather; 2) the risk that the parent company's expenses will continue to rise sharply; 3) the risk that Dongfang Jiayuan's losses will increase.