Dairy enterprises in the whole industry chain, holding only two licenses to produce infant formula in China. At the beginning, the company was only a raw milk supplier, but now it has developed into a large-scale dairy enterprise with a full industry chain integrating comprehensive use of forage - breeding and breeding - livestock breeding - processing and sales of dairy products and meat products. Huayuan Dairy, a holding subsidiary of the company, and Ximu Dairy, a wholly-owned subsidiary, are the only two dairy companies in China that are qualified to produce infant formula, and can enjoy the dividends of increased consumption of milk powder brought about by the two-child policy. Raw milk prices are expected to bottom up, boosting the profitability of the company's fresh milk business. We believe that domestic raw milk prices have bottomed out and the probability that they will reach a new low level is extremely low. It is expected that next year will usher in a new upward cycle. The core logic is that domestic and foreign farming industries generally lose money, leading to continued supply-side contraction. As the dairy company with the largest number of dairy cows in A-shares, the rise in raw milk prices can not only boost the profitability of the company's fresh milk business, but also benefit its dairy business from cost advantages. It is undoubtedly the biggest beneficiary of the increase in raw milk prices in A-shares. Laying out the beef cattle business, the “Isolated Slaughter Project for Importing 100,000 Australian Cows a Year” is about to be put into operation. The company is a frozen meat national reserve and storage enterprise. The wholly-owned subsidiary Carvan Foods specializes in slaughter and split processing of beef and sheep, and has a production capacity of slaughtering 50,000 heads of cattle and 1 million sheep per year. The company has the largest population of purebred “Red Angus” beef cattle in the northwest region, and has its own beef cattle breeding scale of about 10,000 heads. Relying on its subsidiary Zhejiang Yiheng Animal Husbandry, the “Isolated Slaughter Project for Importing 100,000 Australian Beef Cows a Year” is expected to be put into operation by the end of this year. Its cost advantages and location advantages will help the company expand the beef market in East China and the whole country. The project is expected to become a new profit advantage for the company. The company is actively raising funds to repay high loans. Financial cost pressure is expected to be broken. By the end of June this year, the company still has 932 million yuan in short-term loans. We believe that the financial cost pressure brought about by the company's high short-term loans can be gradually lifted. First, as of the end of June, the company had 289 million yuan in debt, and its repayment can be used to repay part of the company's short-term loans. Second, following the allotment of shares, the company may once again use equity financing to repay short-term loans. Finally, government grants can also be a source of repayment. Profit forecasts and investment recommendations are based on the above analysis. We believe that the company's performance is expected to bottom out this year and begin to pick up next year. Since it is impossible to predict the future slaughter volume of Yiheng Animal Husbandry, we consider the contribution of its performance as a flexible consideration. Without considering the impact of Yiheng Animal Husbandry on the company's performance, we make conservative and optimistic predictions about the company's performance. Conservatively, the company's EPS from 2016 to 2018 is -0.20, 0.10, and 0.22 yuan/share, respectively, and optimistically, the company's EPS from 2016 to 2018 is -0.15, 0.18, and 0.32 yuan/share, respectively. Although it will take time for the company to turn its losses into profit, the market has strong expectations that raw milk prices will rise. As the listed company with the largest scale of dairy farming in A-shares, Western Animal Husbandry has become the focus of market attention. Currently, the company's market value is only 3.67 billion yuan. We believe that the company is on the cusp of rising raw milk prices, and at the same time compounding expectations that performance bottomed out and rebounded. Its stock price is extremely flexible, and the target price is 22 yuan.