Key points of the report The company's interim report shows that the operating income of the 2017 mid-year report was 6.049 billion yuan, up 212.45% year on year, net profit attributable to shareholders of listed companies was 234 million yuan, up 124.12% year on year, and EPS was 0.16 yuan. Q2 revenue and performance were 2,849 million yuan and 86 million yuan respectively, up 145.60% and 55.83% from the previous year, respectively, in line with market expectations. The expected operating performance for the first three quarters was 323-393 million yuan, an increase of 130%-180% over the previous year. The incident commented that the agrochemical industry is warming up and the petrochemical business continues to develop, and the company's performance has reached an inflection point. Since the second half of 2016, the global pesticide market has seen a recovery in the global pesticide market as the start of the inventory replenishment market by international agrochemical giants, leading to a recovery in overseas demand. Affected by multiple factors such as early environmental inspections, the suspension of production restrictions by enterprises, and the increase in market demand, and the advancement of policies related to the pesticide industry, the pesticide industry has gradually broken out of its trough. According to the 2017 interim report, the company's operating income for pesticides and pesticide intermediates was 2,386 billion yuan, an increase of 65.56% over the previous year; the revenue from storage, transportation and trade of oil and commodity chemicals was 3.613 billion yuan, an increase of 795.70% over the previous year, becoming a stable business profit growth point for the company. There has been a decline in gross margin, divesting the loss-making business of Agricultural One Network. The gross margin of 2017 H's pesticides and pesticide intermediates was 16.42%, a year-on-year decrease of 4.28 percentage points. We believe it is mainly due to a certain increase in raw material prices; the gross margin for storage, transportation and trade of oil products and commodity chemicals was 1.76%, a decrease of 1.66 percentage points over the previous year. In order to reduce the drag on the business performance of agricultural one network, the company transferred 81.41% of the shares of agricultural one network at a transaction price of 55,6375 million yuan, and included in current investment income. Convertible bond projects enrich the product structure and create future performance growth points. The company issued 845 million yuan of convertible bonds in May 2016 to raise funds for projects such as 5,000 tons/year of ammonium phosphine, 1,000 tons/year of anti-depresyl ester, and 2,000 tons/year of methoxyphenylhydrazide. Among them, the anti-inversion projects have already been put into operation, and the ammonium and methoxymethionyl projects will be launched one after another. There is a lot of room for growth in demand for ammonium sulphosate in the future, and the company's performance will improve dramatically. The second phase of the petrochemical project is being organized and will become a new growth point for the company. It is expected that as projects are put into operation one after another, the company's profitability will continue to increase, enhancing the company's overall competitiveness. Maintain a “buy” rating. The company's main businesses of misinamide, octanoyl bromobenzonitrile, and fluconazole are operating steadily. The implementation of the convertible bond project opened up room for the company to grow, and the petrochemical warehousing business increased its performance growth. The company's 2017-2019 EPS is expected to be 0.30 yuan, 0.38 yuan, and 0.45 yuan. Risk warning: 1. Market development risks; 2. Risk of project delays.