Core view: The corticosteroid API giant, with exclusive process route advantages, is currently the largest manufacturer of corticosteroid APIs in China. It currently has a production capacity of about 200 tons, 147 tons in 2011, accounting for about 30% of the world and 60% of the domestic market. The company's prednisone has passed FDA certification, and all other products have passed EU COS certification. It is a supplier to Pfizer and other companies. The company has the only phytosterol synthesis route in China that can be produced on a large scale, replacing the traditional process route with saponin as the starting raw material. The cost advantage of saponin is obvious when the price of saponin is higher than 500,000 yuan/ton. Currently, the price of saponin is about 950,000 yuan/ton, and the cost of the saponin route is high. Among the five major domestic companies, Zhejiang Xianle, Henan Lihua, and Guangxi Wande are in a state of marginal profit, and the company and Xianju Pharmaceutical will become integrators. Methylprednisolone is the main focus of the tablet business. We expect to contribute 10 million profits in '13. The company announced that '11 tablet revenue will be flat. Our main products include dexamethasone acetate tablets, methylprednisolone tablets, prednisone acetate tablets, and triamcinolone tablets. Production capacity restrictions in 2012 are basically unprofitable. The bottlenecks in production capacity have been eliminated after production expansion. The company's exclusive dosage form of methylprednisolone tablets is an anti-inflammatory general medicine used smoothly at home. With the launch of a new round of non-basic drug tenders, our non-basic drug tenders Expected sales volume of about 10 million in '12, '13 It is expected to achieve sales of 50 million. Currently, Pfizer's original research drug has an absolute advantage and is a major variety with annual sales of 500 million yuan. Zengfa plans to acquire the pharmaceutical amino acid API business. We expect to contribute 10 million yuan in profit in 13 years. The company plans to acquire Tianan Pharmaceutical's pharmaceutical amino acid API business and related assets and liabilities through a private sale of 164 million yuan. Tianan Pharmaceutical is the birthplace of amino acid APIs in China. It is the company with the longest production history and the most comprehensive range of amino acid APIs in the domestic amino acid API business. It has a market share of more than 50% in the domestic pharmaceutical-grade amino acid APIs market. Revenue in the first three quarters of 2011 exceeded 80 million yuan and net profit was 5 million yuan. After the acquisition is completed, the two parties share facilities and services such as sewage treatment. Through integration, a synergistic effect can be used to reduce operating costs. We expect to contribute 10 million dollars in profit in '13. We predict that the performance after additional dilution in 12-14 will be 0.19, 0.25, and 0.33 yuan/share respectively. The company is the leader in the corticosteroid API industry, and its position as the two giants with Xianju Pharmaceutical continues to consolidate. The company is in the process of initiating private additional distribution. We expect the company's diluted EPS in 12/13/14 to be 0.19/0.25/0.33 yuan. The current stock price is 6.09 yuan, corresponding to PE 33/25/18 times, and upgraded to a “buy” rating, giving it 30 times PE in '13, with a reasonable value of 7.5 yuan. Risks indicate the risk that additional distribution will not progress smoothly and the risk of industry integration.