Listed in 2010, Huifeng Co., Ltd. is the world's largest manufacturer of misinamide, the largest producer of capryloyl bromobenzonitrile, and fluconazole in China. According to the company's announcement, the company currently has a production capacity of 6,800 tons of misinamide, 7,000 tons of capryloyl bromobenzonitrile, and 1,200 tons of fluoconazole. It is a leading pesticide raw material enterprise with core intellectual property rights in China. At the same time, the company issued 840 million yuan of convertible bonds in April 2016 to raise and expand production capacity of 5,000 tons of ammonium phosphates, 1,000 tons of anti-invert esters, and 2,000 tons of methoxyphenyl hydrazide, which is expected to become a new profit growth point. Based on convenient transportation at Dafeng Port, we will vigorously develop petrochemical warehousing business. The company used overfunded capital to build a 308,000 square meter petrochemical storage project and obtained a refined oil business license at the end of 2015. Currently, the first phase of the project, 130,000 square meters has entered the normal operation stage, gradually contributing to performance. The company's operating income has maintained an increase of more than 20% in recent years. Affected by the downturn in the global pesticide industry in 2015, there was a negative increase in net profit, but with the recovery of the pesticide market in the second half of '16, performance returned to the growth channel. In the first quarter of 2017, the company achieved revenue of 3.199 billion yuan, a year-on-year increase of 312.39%, net profit of 148 million yuan, a year-on-year increase of 200.26%, and a year-on-year increase of 86.76% after deducting non-net profit of 89.17 million yuan. The main reasons for the sharp increase in performance: (1) Benefiting from the recovery of the pesticide market and the sharp rise in volume and price of major products, the company's patented products and differentiated formulation products have increased their share in formulations. (2) Huifeng Petrochemical, a wholly-owned subsidiary, continues to develop. (3) Transfer the equity premium of the subsidiary Nongyiwang and the reduction of losses of Nongyiwang. The pesticide raw materials, formulations and intermediates business remains the company's main source of profit. In 2016, pesticide business revenue was 3.178 billion yuan, accounting for 54.4%, and realized gross profit of 594 million yuan, accounting for 90.2%. In the second half of 2016, the first phase of the petrochemical warehousing project entered the normal operation stage. In 2016, the warehousing business achieved revenue of 2,499 billion yuan, an increase of 1162.99% over the previous year, accounting for 42.8% of revenue, and gross profit of 54 million yuan, accounting for 8.2%. Since its listing, the company has gradually expanded upstream through many mergers and acquisitions, forming a complete industrial chain of “basic chemicals - pesticide intermediates - pesticide raw materials - pesticide formulations”, enhancing the company's ability to withstand risks in the face of fluctuations in the raw materials market, seizing an advantageous position in the market ahead, and increasing the company's production scale and profitability. In 2016, in order to highlight the main agrochemical business and reduce risk, the company completed the equity transfer to the subsidiary Jiangsu Tulip Tourism Development Co., Ltd., and also transferred shares to four chemical subsidiaries whose business conditions were not very optimistic. The company's “Agricultural One Network” is the first agricultural e-commerce platform in China. Since its establishment, the overall development has been rapid, but it has been in a state of loss. It lost 456.13,300 yuan and 235.192 million yuan respectively in 2015 and 2016. In January 2017, in order to reduce the drag on business performance of Nongyi Network, the company transferred 81.41% of Nongyi E-Commerce's shares at a transaction price of 556.375 million yuan. The transferee was Yancheng Nongyi Investment Management Partnership. In the future, the company's online sales will continue to be carried out through the Agricultural One Network, which ensures the stability of domestic sales channels. Leading environmental protection: The company has been the first in the industry to pass ISO9001:2000 standard quality system certification, ISO14001 environmental management system certification, and OHSAS18001 occupational health and safety management system certification, and has become the first enterprise in the Asia-Pacific region to pass the QEHS system certification (quality, environment, and occupational health and safety management systems promoted by multinational companies). Stable customers: We have established stable cooperative relationships with many of the top ten international agrochemical multinational companies such as Bayer, BASF, and Maxim. Some products have become major global procurement bases for multinational companies, while continuously expanding their supply share among old customers. Abundant products: The company's products cover five major series of pesticides, acaricides, fungicides, herbicides, and plant growth regulators, including 33 registered varieties of original drugs. By the end of 2016, the company had applied for a total of 154 product invention patents and obtained 51 authorizations. The PCT for international invention patents applied for 39ian, and had obtained 15 authorizations from the United States, Canada, Australia, the European Union and other countries and regions. Brand quality: Relying on high-quality products, the company has established a good brand image in China, such as the “Huifeng” manufacturing brand and the “UFA” service brand. The “Huifeng” brand was recognized as a “famous trademark in China” in 2012, and the “Huifeng” brand of fresh amine products were recognized as “famous brand products in Jiangsu”, and logos such as “Sunshine Rain Dew” and “Dr. Frog” have also become deeply entrenched in the hearts of the people. Development of the whole industry chain: Continued upstream expansion through mergers and acquisitions has formed a complete industrial chain of “pesticide intermediates - original drugs - preparations”. The company's original drug business and pharmaceutical business complement each other and collaborate with each other, which is the twin engine that has enabled the company to develop rapidly. Profit forecasting and valuation. We believe that the company's future investment in new projects and production capacity will promote continued growth in performance. The company's EPS for 2017-2019 is expected to be 0.28, 0.35 yuan, and 0.43 yuan, respectively. Considering the rapid growth in performance driven by the introduction of new production capacity, the company was given 25 times PE in 2017, with a target price of 7 yuan, and a purchase rating. Risks indicate the risk of environmental protection becoming more stringent. The risk of increased competition in the industry. Additional production capacity unleashes risks that fall short of expectations. Risk of falling pesticide product prices.