The interim results were generally in line with expectations. The company released its semi-annual report. In the first half of the year, the company achieved operating income of 0.542 billion yuan, an increase of 18.33% year on year, net profit attributable to shareholders of listed companies was 0.19 billion yuan, up 12.07% year on year, and 0.179 billion yuan after deducting non-net profit, up 9.21% year on year, corresponding EPS of 0.47 yuan, which is basically in line with expectations. On a quarterly basis, the company's performance continued to grow steadily in the second quarter, achieving revenue of 0.315 billion yuan in a single quarter, up 19.25% year on year, and net profit of 0.113 billion yuan, up 12.67% year on year. By product, the company's paste and pill products developed steadily. During the reporting period, paste achieved revenue of 0.417 billion yuan, an increase of 20.82% over the previous year; pills reached 0.036 billion yuan, an increase of 64.50% year on year. Sales channels have been further strengthened, and the three terminals of hospitals, primary care, and OTC are fully covered. During the reporting period, the company's sales channels were further strengthened. At the hospital level, the company adhered to a brand-driven academic marketing strategy, while continuously improving evidence-based medical evidence to enhance the clinical value of related products. On the other hand, efforts to launch new products will be stepped up to lay the foundation for rapid coverage of new products. At the grassroots level, the sales team continues to sink, further expanding terminal sales coverage; at the retail market level, the company is continuously increasing its Tibetan medicine brand building efforts to enhance its brand influence. We expect that with the continuous improvement of the company's sales channels, the company's performance is expected to continue to grow steadily. In terms of expenses, due to the company's strengthened layout of sales channels, sales expenses increased by 42.52% compared to the same period last year, an increase of 2.37 percentage points, but they are still within a manageable range. R&D is progressing steadily, and we are looking forward to the full year's performance. In terms of research and development, the company is also continuously strengthening. Currently, the company's Huitang tablets have completed phase II clinical trials for colds and influenza, and are undergoing phase III clinical trials; phase Iia clinical trials with analgesic aerosols to treat sprains are progressing smoothly, and we are optimistic about the company's long-term development. Financial forecasts and investment recommendations Due to the increase in sales expenses due to the increase in the company's sales promotion, we have slightly lowered the company's profit forecast. It is estimated that EPS for 2018-2020 will be 0.84/0.97/1.08 yuan (the original forecast was 0.95/1.06/1.16 yuan), maintaining the company's 18-year 40-fold valuation. The corresponding target price is 33.60 yuan, maintaining an increase rating. Risk warning If the company's brand improvement efforts fall short of expectations, it may affect the company's future performance level; the company's new drug development falls short of expectations.