Event: The company released its 2018 annual report: the company's total revenue was 526 million yuan, up 20.51% year on year; operating profit was 154 million yuan, up 119.43% year on year; total profit was 161 million yuan, up 113.85% year on year; net profit attributable to parent company was 137 million yuan, up 110.83% year on year. Achieved earnings of 1.15 yuan per share. The company's distribution plan is based on 123 million shares, and distributes a cash dividend of 3 yuan (tax included) for every 10 shares to all shareholders, and uses the capital reserve fund to transfer 9 shares to all shareholders for every 10 shares. According to the first quarterly report, in January-March 2019, net profit attributable to shareholders of listed companies was 30,000 to 36 million yuan, up 12.36%-34.83% year on year. Comment: Prices of photoinitiator products generally rose in 2018, which directly led to an increase in the company's revenue and net profit. Revenue for the 1st to 4th quarter of 2018 was 116 million yuan/136 million/141 million million/132 million yuan in that order. The imputed non-net profit was 26.19 million yuan/35.15 million yuan/37.66 million yuan/29.24 million yuan, respectively. The net profit margin was 23%, 26%, 27% and 22%. The company's profits in the second and third quarters were relatively good. By business, photoinitiator products achieved revenue of 252 million yuan, an increase of 40.66% over the previous year, accounting for 47.93% of the company's total revenue. The gross profit margin was 42.64%, and gross margin increased 13.83% over the previous year; thiol compounds and derivatives achieved revenue of 260 million yuan, an increase of 6.36% over the previous year, accounting for 49.49% of total revenue, a gross profit margin of 46.51%, and a gross margin increase of 10.85% over the previous year. Almost all of the company's revenue and profits come from photoinitiator products and thiol compounds. During the reporting period, the company's product output was 7,242 tons, up 9.20% year on year; sales were 4,293 tons, up 1.09% year on year. It can be judged that the increase in the company's revenue and net profit was mainly due to the increase in product prices. At the industry level, due to the impact of environmental protection, the prices of various photoinitiator products rose in 2018. Among them, the prices of 1173, 184, TPO, and 907 increased by 91%, 24%, 30%, and 94%, respectively. China is the largest producer and exporter of photoinitiators in the world. Production concentration is constantly increasing. The company is rapidly expanding the photoinitiator category and product scale, and expanding its market share. At present, China has become the largest producer of light-curing raw materials and formulation products after the US and Japan. In particular, photoinitiators have become the largest producer and exporter. There were several hundred original photoinitiator manufacturers in China. After more than ten years of full competition, the concentration trend is becoming more and more obvious. According to 2016 statistics, photoinitiator manufacturers have concentrated to 16. The company seizes the opportunity, rapidly expands product categories and scale, puts products on the market ahead of competitors, and seizes the opportunity. Market share is expected to increase rapidly. In terms of cost and scale in the future, the company's product competitive advantage is very obvious. According to our assumptions, the company is expected to achieve earnings of 1.4 yuan and 2.0 yuan per share in 2019-2020, corresponding to PE 25 times and 18 times, and continue to maintain the company's “Highly Recommended - A” investment rating. Risk warning. The photoinitiator production capacity in the new construction project was successfully released. If it falls below expectations, our production assumptions are too high; the photoinitiator market relies on downstream development. Assuming that downstream growth is weak, demand for the industry will not grow, which will have an impact on net profit growth.