Key investment performance summary: The company achieved operating income of 380 million yuan in the first quarter of 2018, an increase of 7.70% year on year; realized net profit of 59 million yuan, an increase of 27.70% year on year; EPS of 0.40 yuan. The company is number one in the probiotics industry and has outstanding competitiveness. The company's business is mainly divided into pesticides and flame retardants. Pesticide products are mainly prothiol, pyrimidine and other products. Among them, the production capacity of protisol is the highest in the world. Flame retardants mainly include decabromodiphenyl ethane, flame retardant masterbatches and other flame retardant products. The company's main varieties of pesticides and flame retardants all have relatively complete intermediate self-supporting capabilities and outstanding competitiveness. In the first quarter of 2018, prices of major products increased year over year, and gross margin reached a new high. The unit price of the company's pesticides and pesticide intermediates increased 9.91% year on year in the first quarter of 2018, and the price of flame retardants and intermediates increased 16.81% year on year. In terms of sales, sales of flame retardants and flame retardant intermediates declined slightly, and sales of pesticides and pesticide intermediates remained flat. The company's gross margin increased significantly. The consolidated gross margin reached 42.54% in the first quarter, the peak of gross margin in all financial quarters disclosed by the company. The fund-raising project is about to be put into operation, bringing new growth momentum. According to the disclosure of the company's annual report, several IPO fundraising projects will gradually come to an end in 2018. Among them, 1,000 tons of pyrimidine production capacity will be put into operation in June 2018, and 6,500 tons of pesticide formulations, 1,500 tons of melamine polyphosphate, and 10,000 tons of compound masterbatch will be put into operation by the end of 2018. Profit forecasting and ratings. EPS is expected to be 1.92 yuan, 2.50 yuan, and 2.90 yuan respectively in 2018-2020, and net profit returned to mother will maintain a compound growth rate of 25% over the next three years. Maintain a target price of 38.40 yuan and a “buy” rating. Risk warning: safety and environmental risk, risk of price changes of major products, risk of changes in raw material prices, risk of capital raising investment projects, risk of exchange rate changes.