Event: 15-year Q1 revenue and net profit were 165 million and 34 million respectively, an increase of 302.15% and 470.31% EPS0.12 yuan over the same period last year, which is in line with our expectations.

Comments: 1) the main source of net profit of the company in the past 15 years is the pharmaceutical sector. The net profit structure of chemical industry and pharmaceutical industry in the first quarter is expected to contribute 6 million (chemical profit in the same period of 14 years is 6.0251 million, and chemical net profit is expected to increase slightly in 15 years) and 27 million respectively, and Jinbao pharmaceutical industry is expected to contribute 110 million profit for the whole year.

2) there is no doubt that the comprehensive transformation of pharmaceutical strategy, the extension of Jinbao pharmaceutical industry is only the first step. The company planned the merger and acquisition of Jinbao Pharmaceutical Industry in November 13 and formally included it in October 14; the second merger and acquisition in November 14, although aborted in December of the same year, demonstrated the company's determination to continue its extension layout; it is expected that there will be new extension activities in 15 years.

Valuation rating: the company's traditional chemical industry is affected by the macro environment of the industry and strives for sustained restorative growth in the future; Jinbao Pharmaceutical, which has successfully acquired excellent assets, is regarded as the first stick of the transition pharmaceutical health strategy. it is expected that the move to continue to develop the pharmaceutical industry in the form of mergers and acquisitions will continue, becoming the first year of the company's transformation within 15 years, and will enjoy the high growth and high valuation of the pharmaceutical industry. Without considering the subsequent extension, the EPS in 15-17 is expected to be 0.50,0.66,0.80 yuan respectively, corresponding to 43 times, 33 times and 27 times of PE.

Risk hint: the extension is lower than expected.