Investment highlights: The company announced the 2018 pre-increase announcement: It is estimated that the net profit range for the whole year is 1.46 to 158 billion yuan (YoY +15%-25%), of which the net profit range for Q4 is 0.34 to 46 billion yuan (YoY +70%-130%, QoQ +0.0%-35.3%). The performance is generally in line with market expectations. The increase in the company's performance is mainly due to the steady growth of its main business, semiconductor chemicals, and Jiaying Photosensitive, which has benefited from an increase in the price of environmentally restricted products. Semiconductor-specific chemicals are growing steadily, and its participation in Xinyu, Changsha further expands product space. The company is a manufacturer and supplier of a full range of photoresist (PCB+LCD+semiconductor) initiators. Its main customers include major global photoresist manufacturers such as Changxing Chemical, Nissei Chemical, and Hitachi Chemical. As production capacity in downstream industries continues to shift domestically, domestic LCD, semiconductors, etc. will enter a period of rapid growth in the next two years, driving steady growth in the company's traditional business. At the same time, in recent years, the company has begun mergers and integration in the field of initiators. In 2016, the company acquired Jiaying Photosensitive, which mainly produces photoinitiator products and intermediates such as benzoin, phenylacetyl, and benzoin dimethyl ether. Among them, phenylacetyl is the main raw material for the company's initiators, and the industry chain extends upstream. In 2018, the company's product prices have increased, and the company's product prices have risen, and performance is expected to improve markedly. The company previously announced its participation in Xinyu, Changsha, which is currently the largest manufacturer of photosensitive initiator series products in China. The products include more than 20 varieties including 1173, 184, 369, 907, TPO, PBZ, and ITX. Through capital increases and acquisitions of Changsha Xinyu, the company will further expand its product space, which is conducive to increasing market share and accelerating future development. The industrial chain extends downstream, and solventless UV-LED curing materials open up room for growth. The company announced that it plans to acquire 10% of Gelin's shares. Gelin Photosensitive is an enterprise specializing in the development and sales of LED light-curing materials and photosensitive materials. The products mainly support the ink, paint, adhesive and other industries. Benefiting from stricter domestic VOCs policies, more energy-efficient and safer UV-LED technology has begun to be applied in the ink, paint, and adhesive industries. The expansion of the company's photoinitiator business downstream from its own photoinitiator business is conducive to further broadening the company's development space, and the actual controller promised to deduct non-net profit for two consecutive years at the latest, and inject its shares in Greene's photoreceptor into the listed company, which is expected to become a new profit point in the future. Joining hands with Taiwan's Yulei Optoelectronics, OLED sublimation materials are mass-produced to fill the domestic gap. The company cooperated with Taiwan Yulei Optoelectronics, an international leader in OLED materials, to establish Strong Yulai, which began production in September 2017. The OLED material sublimation production line has already built 6 sublimation machines and 1 evaporator in 2017. It is planned to add 10 sublimation machines in the second half of 2018. At this stage, OLED sublimation materials have been mass-produced, and have entered the R&D and production lines of major domestic OLED panel manufacturers, filling the domestic gap. In addition, Qiangli Yulai and LG Chemical signed a “Laboratory Operation Cooperation Agreement” and jointly set up an OLED material evaluation laboratory in Chengdu to provide OLED materials to Chinese display panel manufacturers. This time, Qiangli Yulai has established a cooperative relationship with the international leader LG Chemical, which will help the company improve its technology in the field of OLED materials, further expand the market, and lay the foundation for possible further cooperation in the future. Investment advice: Maintain the “increase in holdings” rating. The company's 18-year cost increase was slightly higher than our expectations, downgraded 2018, and maintained the 2019-2020 profit forecast. The estimated net profit for 2018-2020 is 1.50 (original value 1.65), 2.23, and 271 million yuan, EPS 0.55, 0.82, and 1.00 yuan, corresponding to PE 51X, 34X, and 28X. Risk warning: New project development falls short of expectations, product costs have risen sharply, and Greenland's profit falls short of expectations