Report Guide The company published its 2018 annual report. Key investment points The main business grew rapidly. During the reporting period, the company achieved operating income of 1,618 billion yuan, an increase of 38.51%, net profit of 374 million yuan, an increase of 57.98%, net profit after deduction of 376 million yuan, an increase of 81.43%, an increase of 81.43%, and an EPS of 1.06 yuan, an increase of 58.21%. On a quarterly basis, Q4 achieved operating income of 597 million yuan, an increase of 38.57%, net profit of 148 million yuan, an increase of 11.2%, net profit of 145 million yuan, and net profit of 153 million yuan after deducting non-return to the mother, an increase of 35.74%. By product, the company's main varieties, Dingkundan Honey Pills, and Niuhuang Qingxin Pills, have growth rates of 107.61%, 153.96%, and 196.01% respectively, which have more than doubled. The high growth trend is expected to continue. The high growth trend is expected to continue. The high growth trend is expected to continue. Due to prescription drug restrictions, the growth rate of Turtle Age Group is expected to increase again in the future with the promotion of health wine. The health wine sales model took shape, and the company's “catering as the core, supermarkets, and pharmacies as the two wings” development strategy began, adhering to focusing on the high-end health wine market. It has completed the channel layout in Shanxi, Zhejiang, Jiangsu, Guangdong, Fujian and other markets, quickly replicating the successful experience of model markets, closely integrating online and offline, developing differentiated marketing around key regions and target consumers, and increasing cooperation with Tmall, Jingdong and other retail platforms online, continuously accumulating consumers. The company's health wine sales increased by 52.55 million yuan over the previous year during the reporting period, 49 %. The next 3-5 years are expected to become an explosion period for the company's health wine business. Improving the quality of operations into the next phase is due to the high unit price of the company's products, weak brand strength in the early stages of development, limited bargaining power compared to channel vendors, and rapid terminal expansion. Since the launch of the OTC strategy in 2016, the number of terminals in hospitals above level II has increased from 1,498 at the end of 2015 to more than 6,000, and the number of OTC terminals increased from 20,000 at the end of 2015 to nearly 150,000 at the end of the reporting period. As a result, accounts receivable have continued to increase, affecting the health of financial indicators. The company has set the business goals for 2019 as “revenue of 2 billion yuan and net profit of 4.2 billion yuan”. We believe that this year the company hopes to continuously optimize the structure, improve the quality of operations, and solve the problems left over from the previous period while ensuring steady growth in performance. As the company's brand power continues to improve and the number of consumers continues to increase, we believe it is expected that the quality of operations will be improved within the year. Profit forecasting and valuation We believe that the company has a long brand history, excellent product quality, broad industry space, a clear development path, and a good start. It is a probable event that the company will continue to grow rapidly in the future. We forecast that the company will achieve operating income of 2,234 billion yuan, 3,081 billion yuan and 4.357 billion yuan respectively in 2019-2021, with year-on-year increases of 38.01%, 37.94% and 41.39% respectively; net profit attributable to the parent company of 425 million yuan, 620 million yuan and 921 million yuan respectively, year-on-year increases of 13.67%, 45.82% and 48.54% respectively; corresponding to EPS of 1.21 yuan, 1.76 yuan and 2.61 yuan, corresponding to current PE, 29 times and 20, respectively Multiply and 14x, maintaining the “Overweight” rating. The risk suggests that terminal sales are not expanding smoothly. The promotion of health alcohol has fallen short of expectations. The sales expense ratio remains high. Accounts receivable are not recoverable.