The interim results were in line with expectations. With a forecast increase of 130%-180% in the first three quarters, Huifeng Co., Ltd. released its 2017 mid-year report, achieving revenue of 6.049 billion yuan, a year-on-year increase of 213%, and net profit of 234 million yuan, an increase of 124% over the previous year. Based on the latest share capital of 1,507 million shares, the corresponding EPS was 0.16 yuan, and the performance was in line with expectations. Among them, the second quarter of 2017 achieved revenue of 2,849 billion yuan, an increase of 146% over the previous year, and achieved net profit of 86 million yuan, an increase of 55.8% over the previous year. At the same time, the company also expects net profit of 323-393 million yuan from January to September 2017, an increase of 130%-180% over the previous year, corresponding to net profit of 0.89-159 million yuan in the 2017 Q3. The agrochemical business bottomed out and rebounded, and the commissioning of petrochemical warehouses boosted performance growth. In the first half of 2017, prices of the company's main pesticide products (imidine, caprylbromobenzonitrile, etc.) rebounded overall. The company's pesticide and intermediates business achieved revenue of 2,386 billion yuan, an increase of 65.6% year on year, but due to factors such as rising raw material prices and changes in product structure, the gross margin of the business fell 8.7 pct to 16.4% year on year. Meanwhile, the first phase of the company's petrochemical project was put into operation, and the oil and bulk chemicals storage, transportation and trading business achieved revenue of 3.613 billion yuan, an increase of 796% over the previous year. In addition, investment income increased 104% year over year to 62 million yuan due to the premium transfer of Nongyi Network's shares. There is still a foundation for continuous growth. In the first half of 2017, the company built up and implemented convertible debt projects (5000t/a glyphosate, 1000t/a methoxylhydrazide). Among them, the anti-invertase project was put into operation in September 2016. The glyphosate and methoxylhydrazide projects are expected to gradually contribute profits in the second half of the year, and there is still a foundation for continuous growth in the future. Increased environmental pressure may facilitate the release of flexible performance. Since this year, the environmental pressure faced by the pesticide industry has continued to rise. The supply of raw materials and intermediates is tight, and prices have rebounded markedly, which is objectively beneficial to leading enterprises with a high degree of regulation and integration. Currently, the fourth batch of central environmental protection inspections has been launched, and the Beijing-Tianjin-Hebei “2+26” environmental inspection will continue to be carried out, involving key regions such as Sichuan, Hebei, Zhejiang, Shandong, etc., and demand during the peak season has gradually started. The price of pesticide raw materials is expected to be released. Maintaining the “increase in holdings” rating, Huifeng Co., Ltd. has a high degree of industrial chain integration, and deep cooperation with international core customers will fully benefit from the recovery of the global pesticide industry and domestic supply-side contraction. Fundraising projects such as glyphosate will form an important growth point in the future. Based on the company's interim report and recent price trends for pesticide products, we raised the company's 2017-2019 EPS to 0.28, 0.33, and 0.38 yuan, respectively (the original forecast was 0.27/0.32/0.37 yuan), maintaining the “gain” rating. Risk warning: environmental risk, risk of fluctuating raw material prices, risk of sales of new products falling short of expectations.