Key investment points: The latest price of pyrimidine is 380,000 yuan/ton, up 22.6% from the same period last year. According to data from Zhuochuang Information, the latest price of the original drug with 98% content of pyrimidine is 380,000 yuan/ton, up 70,000 yuan/ton from 310,000 yuan/ton in the same period in 2017, an increase of 22.6%. The price of pyrimidine has continued to rise since this year. We judge that it is mainly due to the high environmental pressure in the Jiangsu region, which has led to insufficient supply of pyrimidine intermediates, and the overall commencement of construction in the market has remained low. The latest price of probiotin is 55,000 yuan/ton, up 22.2% from the same period last year. According to data from Zhuochuang News, the latest price of Baijiao's original drug is 55,000 yuan/ton, up 10,000 yuan/ton from 45,000 yuan/ton in the same period in 2017, an increase of 22.2%. As a traditional protective bactericide, promycin's market demand is growing strongly. In 2016, the amount of 100% of bacteria collected worldwide was about 28,500 tons, and the amount used in the past 3 years has increased by 6.86%. We judge that in the future, the prices of fungicides such as chloroproterol and pyrimidine will remain high. The company passed a bill to partially change the fund-raising project. The company initially raised 147 million yuan to invest in the construction of 2,500 tons of melamine polyphosphate, 10,000 tons of compound flame retardant masterbatch and warehouse projects. At present, the company has formed a production capacity of 1,000 tons of melamine polyphosphate and has basically completed warehouse construction. Since melamine polyphosphate and flame retardant masterbatch are new environmentally friendly flame retardant products, and marketing is still in the early stages, the company changed the investment amount of the original project to 585.8896 million yuan, and used the reduced amount of 91.3 million yuan for the construction of decabromodiphenyl ethylene and related supporting projects. Decabromodiphenyl ethane was expanded to strengthen its market position. After the investment in this project is completed, it will have an annual production capacity of 15,000 tons of decabromodiphenyl ethane, 32,600 tons of hydrobromic acid, and 1500 tons of aluminum chloride solution as a water treatment agent. The company is the first company in China to produce decabromodiphenyl ethylene flame retardants. It also supports the production of its own intermediate diphenylethane. The industrial chain has been improved. The implementation of this project can increase the production capacity of decabromodiphenyl ethylene and consolidate the current market position. The company expects a construction period of 2 years. After completion, the project will bring in annual sales revenue of 810 million yuan and total annual net profit of 55.96 million yuan. New production capacity in the pesticide business is gradually being released, driving the company's long-term growth. The company's 2016 fund-raising project for the original drug with an annual output of 1,000 tons of pyrimidine was put into operation in January 2018. The pesticide formulation construction project with an annual output of 10,000 tons is expected to be put into operation in December 2018, and the pesticide formulation product technical improvement project with an annual output of 9,000 tons will be put into operation in December 2019. We believe that with the gradual commencement of production of the project, it will bring new profit growth points to the company. Profit forecast. We expect the company's net profit for 18-20 years to be 288 million yuan, 3.38 million yuan, and 393 million yuan respectively, corresponding to EPS of 1.60, 1.88, and 2.18 yuan, respectively, giving the company 14-17 times PE for 18 years, corresponding to a reasonable value range of 22.40-27.20 yuan, giving it an advantage over the market rating. Risk warning. Prices of raw materials fluctuated, project progress fell short of expectations, and downstream demand fell short of expectations.