Investment highlights the improvement in the supply and demand structure of the adhesive industry. We are optimistic about the reversal of the bottom of the viscose staple fiber industry. It is conservatively estimated that the average price of viscose staple fiber in 2016 is 14,000 yuan/ton, and the 2017 price is 15,500 yuan/ton, with a year-on-year growth rate of 9%/11%. The company is a leader in the viscose staple fiber industry. The performance is very flexible, and the rise in the price of viscose products will significantly improve its performance. The company's equity production capacity is currently around 230,000 tons. According to our estimates, every 1,000 yuan/ton increase in the price of viscose staple fiber will increase the company's EPS by 0.21 yuan. Construction of viscose staple fiber began at full capacity, and production capacity was limited 18 years ago. The adhesive industry has been hovering at the bottom for 4 years. Since 2015, the industry has been structurally discontinued due to environmental protection reasons, and the supply structure has improved markedly. Currently, the operating rate has reached a high of 93%. The remaining unstarted production capacity cannot be started due to environmental issues, and the actual effective operating rate is close to 100%. From 16 to 17, only 3% of production capacity was added, and downstream demand grew steadily by about 5% per year. Currently, industry inventories are at a low level, and the G20 meeting to stop work and limit production will become a short-term catalyst for viscose prices. Cotton prices formed support, and expectations of the devaluation of the RMB led to significant growth in viscose exports and downstream textile demand. The solidification of cotton prices and the sharp rise in futures prices have provided strong support for the price of cotton replacement viscose. The depreciation of the RMB had an obvious effect on boosting exports of viscose staple fibers. At the same time, downstream textile foreign trade demand recovered, and downstream cotton shipments in the first quarter of 2016 increased by 246% year-on-year. At the same time, the company entered the big health industry and transformed into a leading private healthcare provider. In 2015, the company acquired Aoyang Health Investment, which owns 4 private hospitals, 3 pharmaceutical distribution companies, and pharmacy chains. In 16/17, the health industry promised profit of 6,000/72 million yuan, respectively (contributing 23%/15% of net profit). The financial forecast predicts that the company's 2016/17 EPS will be 0.37/0.70 yuan, with growth rates of 88% and 91% respectively. Among them, the adhesive sector contributed 0.28/0.60 yuan of EPS, and the health care sector contributed 0.09/0.10 yuan of EPS. The current stock price corresponds to 16/17 34/18x P/E. For the first time, the valuation and recommendations covered Aoyang Technology and gave it a “recommended” rating. Using the segmented valuation method, the target price is 15 yuan, corresponding to a 21% increase. The adhesives and health care sectors were given 20x and 30x P/E valuations in 2017, respectively. The corresponding market values were 8.3 billion yuan and 2.2 billion yuan, respectively, and the target market value was 10.5 billion yuan. The high-risk health business fell short of performance promises, and consolidation fell short of expectations; adhesive prices declined.