The performance of the first three quarters was impressive. The company's third quarter report showed that net profit after deducting non-net profit increased by 56.07% year-on-year. According to the company's third quarter report, the first three quarters of 2018 achieved revenue of 3,336 billion yuan (+22.88%), net profit of 393 million yuan (+51.95%), net profit after deducting non-net profit of 393 million yuan (+56.07%), and excellent performance. Net operating cash flow was $228 million, up 50.08% year on year. As a leader in the OTC industry, the company has a strong product brand cluster. Relying on advanced marketing and marketing management models, the company has steadily increased profitability. The share of own products has increased, driving the overall gross margin level. The company has broken the bottleneck of its own development through OEM business and an efficient supply chain system. Compared with OEM products, its own brand products have high margin and good safety. By increasing the marketing efforts of its own brands, the company has raised the overall gross margin level. The overall gross margin of pharmaceuticals in 2017 was 35.63%, up 3.14pp year on year. The gross margin for the first half of 2018 was 43.17%, up 6.80 pp year on year. Increase the expansion of the marketing channel network, and focus on building the general direction of terminal and channel development for gold single products companies that adhere to the “direct supply terminal branding and diversification of sales channels”. While stabilizing the terminal market, they are deepening the expansion of chain, medical channels, and network channels. The sales network covers 30 provinces and cities across the country, further consolidating the leading position in the industry. At the same time, the structure of sales varieties has been optimized, focusing on building single gold products and key varieties, increasing marketing efforts for independent brands, and further improving resource utilization. Investment in research and development was increased. Sales and management expenses increased significantly in the first three quarters. The company spent 24 million yuan on R&D in the first three quarters, an increase of 48.07% over the previous year. Mainly due to the company's increased investment in research and development of new products, it has begun to evaluate the consistency of six chemical generic drugs, including amlodipine benzenesulfonate tablets and glizide sustained-release tablets. The company's sales expenses in the first three quarters were 603 million yuan, an increase of 37.78% over the previous year, mainly due to the increase in the company's sales staff salaries, transportation and miscellaneous expenses, and publicity expenses. Management expenses were $214 million, an increase of 27.08% over the previous year, mainly due to an increase in sales consulting fees and service fees incurred by the company to expand product sales. Accounts receivable for the first three quarters were 644 million yuan (+110.93%), mainly due to increased sales revenue and increased sales model cooperation with chain terminal customers, and increased credit grants. Valuation and Rating In 2018, the company will continue to promote marketing model innovation, Internet application innovation, and enhance the brand value of corporate brands and products. The company actively carries out the application of classic famous recipes, and will rely on the reputation of classic famous recipes to increase publicity efforts in the future. The EPS for 2018-2020 is expected to be 0.43, 0.53, and 0.65 yuan respectively, with a target price of 8.60 yuan, maintaining the “buy” rating. Risk warning: 1. The marketing of brand products falls short of expectations; 2. Product competition in various fields is intensifying; 3. Excessive cost rates during the period affect the level of net profit