Core view: There is a huge gap in natural ice flakes, and there is considerable scope for import substitution and export sales. The company is expected to become an inflection point in the performance of Jinsha Pharmaceutical, where national standard makers and industry leaders wholly-own the natural ice flakes industry. Mass production of natural ice flakes creates growth rates and valuation highlights, and the company's traditional leading products are facing growth bottlenecks. Since the establishment of the factory, Jiaying Pharmaceutical has been focusing on the fields of throat medicine and cold medicine. Its main products are Double Throat Relief and Heavy Sensual tablets. Among them, Shuangchuofeng is scattered in southern China such as Guangdong and other regions, which already occupy more than 3% of the market share. In the past two years, the company's profit growth rate has been weak due to rising production costs and sales expenses. The localization of high-purity natural dextrans helped the company become a “local tycoon”. Natural dextroporin, commonly known as borneol, is the main formula ingredient for more than 60 commonly used traditional Chinese medicines, such as compound salvia salvia, quick-acting heart-saving pills, musk baoxin pills, and double throatophilic medicine. Natural dextrans is extracted from plants, and production is scarce due to scarce resources. The domestic gap is at least 500-1,000 tons, accounting for half of the global gap. Moreover, it is expensive. The price of medicinal natural dextrophane with a purity of 95-98% is as high as 3000-10,000 yuan/kg. In this context, synthetic ice sheets are popular due to their low prices and simple processes. They are widely used in many countries, including China, and the price is only 80-100 yuan/kg. Guangdong Huaqingyuan Biotechnology Co., Ltd., which holds 45% of the company's shares, has mature technology and experience in cultivating and planting plum blossom trees with high “brain” content and extracting high-purity natural dextron from leaves. It also has a 3,000-acre plum tree planting base that has signed a 30-year land use agreement with farmers. It is expected to produce at least 45 tons of high-purity natural dextron in 2016. The project has been included in the Guangdong Sailing Plan. It is a key project for the second greening of the province and building a green GDP. It has received full support from governments at all levels in Guangdong Province and local farmers, and has enjoyed various benefits such as reduced value-added tax and income tax. After taking full ownership of Hunan Jinsha Pharmaceutical, it formed a synergistic effect and enhanced its core competitiveness. On the product line, the company expanded from medicine for colds for the throat to the field of traditional Chinese medicine for bone injuries; on the channel, retail markets in South China and Southwest China entered hospital terminals in all provinces and cities across the country, creating a win-win and mutually beneficial situation. Sands Pharmaceutical promised that net profit after deduction for 2013-2015 will not be less than 52 million yuan, 53 million yuan, and 78 million yuan respectively, and that the growth rate of Jiaying Pharmaceutical's performance has reached an inflection point. Profit forecasts and valuations. We expect the company's EPS in 2013-2015 to be 0.54 yuan/0.58 yuan/0.75 yuan respectively, corresponding to PE 36.4 times /34.0 times /26.2 times. With the strong support of governments at all levels in Guangdong Province and local farmers, the company is expected to expand its plum tree planting base on a large scale in the future, with huge potential value/growth space, giving it a “buy” rating for the first time.