Summary of the report: The pesticide industry has reached an inflection point, and the company's performance in the first quarter increased dramatically: in the past two years, international agrochemical giants have lowered their inventories one after another to survive the cold winter. The inventory removal phase has basically ended, and a new round of inventory replenishment cycle has entered, and China's pesticide raw drug exports will rise accordingly. On the supply side, the domestic high-pressure environmental protection trend continues, the supply of pesticide raw materials and intermediates is limited, prices have risen markedly, and the supply and demand pattern of the industry has improved. 2017 is likely to be the first year of recovery for the pesticide industry. In the first quarter of 2017, the company achieved revenue of 3.2 billion yuan, a sharp increase of 312% over the previous year, and realized net profit of 148 million yuan, an increase of 200% over the previous year. The increase in the production and sales volume of the company's products, the rise in prices, and the volume of petrochemical warehousing business are the main driving forces for both the company's revenue and net profit. The fund-raising project is about to be put into operation, and Huifeng Co., Ltd. is on another journey: the company issues 865 million yuan of convertible bonds to raise capital for 5,000 tons/year of ammonium phosphine, 1000 tons/year of anti-depletion ester, and 2000 tons/year of methoxymethacyl hydrazide projects. The ammonium sulphosate project is expected to be put into operation in the middle of the year, which will greatly increase the company's performance. Furthermore, the company divested the Agricultural One Network platform, which continued to lose money, which helped improve the company's profits. There are plenty of orders for existing products, and rising prices are beneficial to the company's performance: the company's traditional products, micanamide and fluconazole, all have leading production capacity in the world, and orders are full. Bifenthrin was affected by production capacity restrictions for raw materials biphenyl alcohol and gungfu acid, and the price increased significantly. Meanwhile, the company's holding subsidiaries Cofit and Huatong each produce these two bifenthrin intermediates. Prices of products such as fluconazole have also risen to a certain extent. In the current context of the continued tightening of the environment, product prices are expected to remain high for a long time. Profit forecast: The company is expected to achieve revenue of 11.894 billion yuan, 14.040 billion yuan and 17.190 billion yuan in 2017-2019, with year-on-year increases of 103.65%, 18.04% and 22.44%; net profit of 462 million yuan, 636 million yuan and 772 million yuan, year-on-year increases of 164.98%, 37.59% and 21.34%; corresponding to EPS 0.31 yuan/share, 0.42 yuan/share, 0.51 yuan/share, corresponding to PE 16X, 12X, and 10X. Give a “buy” rating. Risk warning: the risk that ammonium phosphosate production capacity will not be released as expected; the risk that the price of phosphosate and other products will fall; the risk that environmental policies will cause phased production capacity to be limited.