Report summary: In the first half of 2017, the company achieved operating income of 6.049 billion yuan, an increase of 212.45%; net profit attributable to shareholders of listed companies was 234 million yuan, an increase of 124.12% over the previous year; at the same time, the company expects net profit from January to September 2017 to be 323 million yuan to 393 million yuan, an increase of 130%-180% over the previous year. The pesticide business is running steadily, and the petrochemical warehousing performance is increasing: The company's pesticide business follows a differentiated route. The core products are misinamide, octanoyl bromobenzonitrile, and fluconazole, which have leading global competitiveness and rank first in the world/domestic production capacity. In the first half of 2017, the company's pesticides and intermediates achieved revenue of 2,386 billion yuan, an increase of 65.56% over the previous year. The increase in revenue mainly benefited from the increase in the trade volume of the company's pesticide business and the rise in prices of core pharmaceutical products. However, due to the increase in the share of pesticide trade, the gross margin of the company's pesticide business fell 4.28 percentage points. In the first half of the year, the company's petrochemical warehousing business began to grow in volume, achieving operating income of 36.13%, an increase of 795.70% over the previous year. The share of petrochemical warehousing in revenue reached 59.73%, exceeding the share of 39.44% of revenue from pesticides and intermediates. The pesticide business is growing steadily, petrochemical warehousing performance has entered a release period, and the company's cash flow has been clearly optimized. Environmental investment continues to be upgraded, and supply-side policies are favorable: Over a long period of time, the company has invested more than 300 million yuan in environmental protection and safety, built 15,000 tons/day sewage treatment and 6 RTO exhaust gas incinerators. A new high-temperature and high-pressure wet oxidation treatment wastewater treatment plant was put into operation during the reporting period, and a new 70 tons/day solid waste incinerator will be put into operation in September this year. Environmental supervision in the pesticide industry continues to be upgraded, and there are high standards for enterprises to enter the park. The company's leading environmental safety production process will benefit from the improvement in industry supply brought about by stricter environmental protection. The new product is progressing smoothly: in the company's fund-raising project, 1000 tons/year of anti-invert ester has begun production and operation, and 5,000 tons/year of ammonium sulphosate and 2000 tons/year of methoconyl trap projects are progressing in an orderly manner. The ammonium phosphosate project has entered the trial production stage. The second half of the year will gradually show benefits. The commissioning of a new low-toxic and environmentally friendly pesticide will provide the company with new profit growth points. Profit forecast: The company's net profit for 2017-2019 is estimated to be 4.64/6.33/690 million yuan, respectively, and the corresponding PE is 19/14/13 times, respectively, maintaining the “buy” rating. Risk warning: risk of falling product prices; risk of new business not progressing as expected