Event: the company issued a performance forecast, estimated that its 2019Q1 deduction non-net profit was about 17.23 million yuan-22.23 million yuan, an increase of about 3-32% over the same period last year; during the period, the net profit attributed to listed companies was about 20 million yuan-25 million yuan, down about 45-56% year-on-year.

Deducting the steady growth of non-performance, the contribution of specialist drugs increased. The company predicts that the net profit of its 2019Q1 belonging to listed companies is about 20 million yuan to 25 million yuan, which is about 45-56% lower than the same period last year, and the median is about 22.5 million yuan. The negative growth rate is mainly due to the relatively large proportion of non-recurrent profits and losses in the comparable base of 2018Q1. The net profit of 2018Q1 is about 45.56 million yuan, including investment income of about 25.36 million yuan from the sale of some shares in Athenex, and the deduction of non-net profit for the current period is about 16.8 million yuan. In this announcement, the company estimates that the impact of 2019Q1 non-recurring profit and loss on net profit is about 2.77 million yuan. If the estimated 2019Q1 deduction non-net profit is about 20 million according to the median forecast, its growth rate is about 20%. During the period, the continuous growth of specialty drugs is the bright spot of the company, and the compound growth rate of specialty drug revenue from 2013 to 2018 is about 39%, which is faster than the overall revenue growth rate of the company. The proportion of revenue from specialty drugs exceeded that of anti-infection series for the first time in 2016 and is expected to account for more than 50% in 2018. 2019Q1 specialty products such as nano-carbon suspension and esomeprazole still maintain rapid growth, and we expect specialist drug revenue to continue to increase compared with 2018. With the private sale of Tadala, the company's gross profit margin is expected to continue to rise.

Xinwei song volume may exceed expectations, the company's development into the fast lane. 1) Tadalafil (Xin Weige) is a major variety of the company's new agent, the drug is Eli Lilly and Co's original research, the indication is erectile dysfunction (ED). Listed in China in 2005, Changchun Haiyue completed its first domestic imitation in 2019, and awarded the sales agency in China to Leimei. Tadalafil has the advantages of being effective for a long time and free from alcohol and dietary restrictions. For example, referring to the historical case of Baiyunshan Jinge, it sold about 2.9 million tablets in the year after it went on sale in October 2014 and more than 4700 million tablets in 2018, with huge market space. At present, public information shows that Xin Weige has begun to put its goods on the market, and it is conservatively estimated that the revenue brought by Tadalafi in 2019 may exceed 200 million yuan. if you cooperate with e-commerce and other new retail platforms, the revenue will exceed expectations; 2) Nano-carbon suspension injection (Carnarine) is the only approved lymphoid tracer in China, which has a good lymphatic tendency. At present, Carnarine is widely used in the field of thyroid cancer, has carried out a lot of academic work, and is highly recognized by experts. Carnarine does not belong to health insurance, but it can avoid the risk of operation, strong willingness for clinical use and less pressure to reduce prices. It has been used in gastric cancer, thyroid cancer, breast cancer, bowel cancer and other fields, and may be extended to the whole solid tumor in the future. It is expected that with the increase of permeability and the expansion of indications, the income may increase rapidly. 3) esomeprazole enteric-coated capsules (Lemeshu) is the exclusive first imitation of four kinds of new drugs in China, and oral dosage forms are regarded as consistent evaluations. the competition pattern is good and the winning price is more stable at more than 65 yuan per box. As the provinces continue to push forward, and the policy restrictions on the use of PPI injection forms will also be favorable for oral use, it is estimated that revenue will continue to grow rapidly in 2019; 4) Hunan Kangyuan, a subsidiary, is losing money or narrowing. Hunan Kangyuan continues to build a high-end infusion base. In 2019, the focus is to put the drug mixer on the market, and if the sales plan can be successfully realized, Hunan Kangyuan is expected to reduce losses.

Profit forecast and investment advice. It is estimated that the EPS from 2018 to 2020 will be 0.14,0.19,0.28 yuan respectively, and the corresponding PE will be about 57 times, 43 times and 28 times respectively, maintaining the "buy" rating.

Risk hints: 1) product sales may be lower than expected; 2) drug price reduction risk; 3) increased risk of subsidiary losses; 4) other unpredictable risks.