China's glyphosate companies have always been controlled by several major international pesticide multinational companies. Globally, glyphosate preparations are monopolized by several major multinational companies such as Monsanto, Xianongda, and Dow. Until now, China's glyphosate has only been able to enter the international market as an original drug. Due to the rapid expansion of glyphosate production in China, multinational companies are competing to lower China's glyphosate export prices, causing Chinese glyphosate companies to find themselves in deep trouble, and can only maintain meager processing costs. Currently, the company's glyphosate plant is running at full capacity and sales are smooth. The peak sales season in the industry is approaching. The factory price is still around 24,000 yuan/ton, and the gross margin is around 15%. Huaxing is expected to break through the global monopoly of glyphosate preparations by international multinational companies, sell glyphosate preparations directly to the US, and share the rich profits of glyphosate preparations. This is a landmark for China's glyphosate industry. American Evergreen International Co., Ltd. (each holding 50% of its shares), which was established as a joint venture with the US UCPA in 2009, is expected to obtain a registration certificate for glyphosate preparations in the US this year. UCPA is a well-known pesticide distributor in the world. It is an agent of Monsanto's glyphosate preparations. It has annual sales of about 3 billion US dollars. It has rich sales experience and broad sales channels, which can guarantee the expansion of the joint venture's glyphosate formulation business in the US. By opening up international sales channels for glyphosate preparations, the company has achieved downstream expansion, and the company has also developed an upstream layout. If 100,000 tons of chlor-alkali will be put into operation by the end of this year, 80,000 tons of chlorine gas will be generated. The company's project to lay out 100,000 tons of phosphorus trichloride (51% equity) on this basis can meet the company's own needs. Phosphorus trichloride accounts for 30% of the cost of glyphosate, which will greatly reduce glyphosate production costs. The 100,000-ton chlor-alkali project will also generate about 30 million cubic meters of hydrogen, which will be sold to newly established aniline companies at a price of 0.8 yuan/cubic meter. If sales can be achieved smoothly after obtaining the registration certificate, we expect the company to face production capacity bottlenecks, and it is not ruled out that the company will meet export demand in the form of mergers and acquisitions. The consolidation of the glyphosate industry will begin. Other development background: The company has a large amount of industrial land at the fine chemical base in Anhui Province, which will greatly benefit from the construction of the Wanjiang River Industrial Transfer Demonstration Zone; the sale and production of 10% glyphosate solution will be banned next year, which will crowd out a large number of small enterprises. An industrial policy for the pesticide industry will be introduced, which will also benefit large glyphosate manufacturers. The industry reshuffle is expected to be completed this year. Maintain a highly recommended rating. The company is expected to change from a company that mainly sells raw glyphosate drugs to an international glyphosate formulation company. The profit model will change significantly. Currently, there are still some uncertain factors yet to be determined, so we will temporarily maintain the company's 10-11 EPS profit forecasts of 0.74 yuan and 1.00 yuan, respectively. Once the company's business is successfully transformed this year, we conservatively estimate that the company will achieve earnings of 1.27 yuan per share next year, and there will be room for greater development in the future. Therefore, we recommend giving the company a price-earnings ratio of 20 times in 2011, raising the target price for the next 6-12 months to 20.0 yuan, and maintaining the highly recommended investment rating.