Key investment points: Net profit of 51.5 million yuan was achieved in 2018, an increase of 23.53% over the previous year. In 2018, the company achieved revenue of 1,628 billion yuan, a year-on-year increase of 33.66%, net profit of 51.4984 million yuan, a year-on-year increase of 23.53%, and a full-year gross profit margin of 24.25%, a year-on-year decline of 1.38 percentage points. The company achieved revenue of 575 million yuan in the fourth quarter, an increase of 69.98% over the previous year, and net profit of 40.1773 million yuan, an increase of 63.93% over the previous year. In 2018, the company's pesticide product production was 21,400 tons, down 6.59% year on year, and sales volume was 21,500 tons, down 12.08% year on year. The increase in revenue is mainly due to higher prices of the company's main pesticide products. Some prices have even reached record highs. Prices of products and raw materials are generally rising. Affected by higher crude oil prices, environmental inspections and safety inspections, and product market demand, etc., the prices of the company's main pesticide products have gradually rebounded since the end of 2017, and some varieties have reached record highs. The average sales price of products in 2018: kabivir 86,600 yuan/ton, up 30.21% year on year; dedovir 69,900 yuan/ton, up 40.64% year on year; and menavir 46,000 yuan/ton, up 11.65% year on year. Prices of the company's main raw materials also generally rose. Phthalates were 21,300 yuan/ton, up 33.84% year on year; furanol 76,600 yuan/ton, up 18.94% year on year. A leading manufacturer of carbamate pesticides. The company has built a carbamate pesticide raw material production plant with an annual output of 10,000 tons, a heterocyclic pesticide production plant with an annual output of 10,000 tons, and the largest production plant for hydroxypyrimidine compounds in Asia with an annual output of 2,000 tons. The main production varieties include 5800 tons of Carbovir, 4,500 tons of nitinavir, 4,500 tons of methovir, 1,000 tons of pyrimidine, 4,500 tons of methylavir, 1,800 tons of butylthiovir, 3200 tons of methylpyrimidine, and 3,200 tons of methylthiobenzene. Currently, 95% of the company's leading product manufacturing technology comes from independent research and development, and pyrimidine, pyrimidine, phosphorus methylpyrimidine, pyrimidine alcohol, etc. are exclusively produced domestically. Continue to promote the construction of production bases in Changde, Hunan, and Guixi, Jiangxi. In 2018, through technical improvements and operation optimization, the company increased the yield and production capacity of sulfide products, and completed the optimization and transformation of salicynitrile production facilities. In 2019, the company plans to make every effort to carry out production and construction work on key projects such as sulphur, salicylonitrile, and methylpyrime to achieve production results as soon as possible. The company has raised an increase of 206 million yuan for the construction of projects such as heterocyclic pesticides, intermediates, and environmentally friendly pesticide production facilities. Currently, the project progress of the heterocyclic pesticide and intermediates industrialization base project has reached 87%, and we expect it to be put into operation in 2019. Profit forecast. We expect the company's net profit in 2019-2021 to be 107 million yuan, 136 million yuan, and 164 million yuan respectively, and the EPS in 2019-2021 is 0.30, 0.38, and 0.46 yuan/share, giving 18-22 times PE in '19, corresponding to a reasonable value range of 5.4-6.6 yuan (corresponding to 2019 PB of 1.63-1.99 times), maintaining a superior market rating. Risk warning. Changes in environmental protection policies; shortage of raw materials; fluctuations in the RMB exchange rate.