Key investment events: The company released its 2017 three-quarter report. The first three quarters of 2017 achieved operating income of 1,875 billion yuan, a year-on-year increase of 2.8%, and net profit of 453 million yuan, a year-on-year decrease of 10.47%. Affected by rising costs, the third quarter results were slightly lower than expected: the decline in the company's performance was mainly due to rising costs, which led to a decline in gross profit. The gross profit margin for the first three quarters of 2017 was 46.52%, down more than 4 percentage points from the previous year. Affected by environmental protection, the prices of most chemical raw materials have risen, and the prices of the main raw materials purchased by the company have all risen to varying degrees. The company's product prices rose in the third quarter, but due to the relative lag in order execution, it is expected that the contribution of price increases to performance will be reflected in the fourth quarter. The company's main products, anthraquinone disperse dyes such as No. 60 Blue (6000 tons/year), No. 60 Red (5500-6000 tons/year), and No. 54 yellow (3000 tons/year), all increased by 15%-20%. Among them, the main product, No. 60 Blue, began to increase in price in August, from 130,000/ton to 200,000 tons/ton. The supply and demand institutions of the anthraquinone dye industry continue to improve: 1) The company's technical advantages and environmental advantages are obvious. As the impact of environmental protection policies on the heavily polluting chemical industry expands, the supply of anthraquinone dyes and intermediates will be further limited, industry concentration will further increase, and prices are expected to continue to rise. As the leader in the dye and dye intermediates industry, the company will continue to benefit in the future. 2) From the demand side, anthraquinone dyes are mainly used in the middle and high-end markets due to their bright colors and excellent performance. With the improvement of living standards and the pursuit of color by young people, there is a lot of room for improvement in the anthraquinone dye market. Continue to lay out products in fine chemicals, solvent dyes, and other color fields: In 2015, the company entered the solvent dye market through the acquisition of Daobo Chemical. Solvent dyes were mainly used for coloring plastic masterbatches, polyester spinning, and ink. Daobo Chemical's production and operation conditions are good. The production and sales rate in the first three quarters of 2017 was over 100%, and prices also increased by 20%. Other fine chemical fields, such as benzoyl chloride and organic pigments, are also epitaxial fields that the company focuses on. The company signed an investment contract with the Lianyungang Chemical Park Management Committee to plan phase four investment projects. Among them, the first phase is a benzoyl chloride extension product. In July 2017, the company announced the acquisition of 51% of the shares of Jiangsu Jiamai Chemical. Jiamai Chemical is the market leader for benzoyl chloride, has an annual production capacity of 30,000 tons, and some small enterprises in the industry are not environmentally friendly, quality is uncontrollable, etc. As environmental protection becomes stricter, the industry's extensive production and low-cost competition pattern has begun to change. Pigment products are also the company's key products, and the third phase of the project has been planned in Lianyungang Chemical Park. Investment advice: We expect the company's 2017-2019 EPS to be 1.22/1.58/2.09 yuan, respectively, giving a buying rating, with a target price of 25 yuan. Risk warning: Product prices are falling, and the progress of new projects is lower than expected