Key events in the report describe the agricultural seed industry's announcement of the 2015 performance reduction announcement. Incident review The agricultural seed industry expects to achieve net profit attributable to the parent company of 88.44 million yuan in 2015, a decrease of 20% over the previous year, equivalent to 0.2 yuan in EPS; of these, the net profit attributable to the parent company is expected to be 74.47 million yuan in the fourth quarter, a decrease of 23.9% over the previous year, equivalent to 0.17 yuan in EPS. The year-on-year decline in non-recurring profit and loss was the main reason for the decline in the company's performance. After deducting investment income and Henan Yingtai's combined profit, the company's actual endogenous performance increased by about 2.31%. In 2014, the company received investment income of 45.18 million yuan (net profit after tax contribution of about 33.88 million yuan) due to the transfer of shares in Beijing Agricultural Development Property. In October 2015, Henan Yingtai's equity transfer was completed. It is expected that the merger of shares in Henan will begin in November (contributing about 10 million yuan in profits to listed companies). After deducting investment income in 14 years and Henan Yingtai's consolidated profit in 2015, the company's net profit attributable to 2015 increased by about 2.31%. We judge that the increase in the company's operating profit is mainly due to the good sales performance of its seed industry subsidiaries. For example, in 2015, Hubei Seed Group's Huanghuazhan variety achieved good market performance in the Yangtze River Basin. At the same time, the company announced the signing of a “Strategic Cooperation Agreement” with Beijing Boao Jingdian Biotechnology Co., Ltd., which includes cooperation in building a molecular breeding laboratory, a bioinformation big data analysis platform, and planning and implementation of product commercial transformation. We believe that this cooperation will help to further enhance the technical level of the company's breeding research and development. Among them, cutting-edge technologies such as molecular breeding and biological big data will also enhance the company's overall competitiveness in the field of seed industry. We are optimistic about the company's future development prospects. It is mainly based on: (1) The promulgation of agricultural reclamation reform rules to remove barriers to the integration of land resources in reclamation areas. Among the company's major shareholders, the Agricultural Development Group owns 4.3 million mu of domestic land (including 700,000 mu of arable land), which does not rule out the possibility of future injection, and taking advantage of the advantages of China Agricultural Reclamation Corporation, the second-tier majority shareholder, it is anticipated that the company may integrate farms outside the group and participate in farm equity diversification reforms in the future. (2) The company's strategic ideas for building an integrated platform for central enterprises and agricultural resources are clear. The first step is to form a large pattern of seeds and pesticides through epitaxial expansion, and the second step is to strengthen it through internal integration, external research cooperation, and the creation of an “agricultural material+farm+storage” service platform connection model. (3) In the long run, the company's business model may form a closed loop of integrated “agricultural materials+farm+storage” similar to the four major international grain merchants, with broad development prospects. Reiterate the “buy” rating. It is estimated that the company's EPS in 2015 and 2016 will be 0.2 and 0.35 yuan respectively, giving it a “buy” rating. Risk warning: (1) corporate mergers and restructuring fell short of expectations; (2) the speed of service system construction fell short of expectations; (3) the agricultural reclamation reform process fell short of expectations.