Event: 14-year revenue, net profit and net profit after deduction were 343 million, 57 million and 47 million respectively, an increase of 108.27%, 108.76% and 110.14% respectively over the same period last year, which was in line with market expectations. In the profit distribution plan, it is proposed to increase 5 shares for every 10 shares.

Comments:

1) Jinbao Pharmaceutical Co., Ltd. has made a great increase in its performance. After the company established the quota strategy of cross-border transformation of pharmaceutical development, the first bar extended acquisition of Jinbao Pharmaceutical Industry. Jinbao Pharmaceutical Co., Ltd. is expected to have an annual revenue of about 400 million, of which the company's revenue and net profit in the fourth quarter are expected to be 167 million and 32 million respectively. Its main varieties Zhitong Huazheng capsule and Ledafei Reduping granule are expected to exceed 200 million and 60 million respectively. For 15 years, Jinbao Pharmaceutical Co., Ltd. has presented its fourth quarter, and its annual revenue is expected to grow by more than 20%, with a net profit of about 1.1 after deducting it. The performance of the company in the past 15 years comes from the pharmaceutical sector, the overall transformation of medicine is successful, and it is expected that there will be a new pharmaceutical extension layout in the later stage, and the company has a bright future.

2) the macro market of silica performance returns picks up, and the growth rate picks up slowly. Silica is mainly used in green tires in the rubber industry. with the rapid development of the global automobile industry and the improvement of environmental protection requirements, the demand potential of silica is huge. It is expected that the sales of highly dispersed silica for T150 mid-range and TMG high-grade silicone rubber will increase. The company's traditional chemical business revenue for the whole year was 175 million, an increase of 6.31% over the same period last year, and the growth trend is expected to continue for 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 product price reduction risk, the extension is lower than expected.