The leading company in the pesticide segment is a leading global leader in carbamates and heterocyclic pesticides, leading the country with a production capacity of nearly 30,000 tons. The company has obtained synthesis technology and phosphogas production qualifications for the key ingredient furanol. Downstream products occupy a dominant position in the domestic market. Among them, carbaryl, methadrivir, menavir, etc. have a domestic share of 6-70%; caribacil, anti-aphrovir, methylpyrimidine phosphorus, pyrimidinol, etc. are exclusively produced domestically, and the low-toxic derivative DL-thiocarbavel accounts for more than 40% of the domestic export share. Supply continues to be tight, and prices are rising steadily. Urethane insecticides are the sixth largest insecticide in the world. Due to safety considerations, many countries around the world have successively restricted the use or even banned the use or even banned of pesticides such as coppervir in the past 10 years. However, carbamide has the advantages of broad-spectrum efficiency. Some crops have irreplaceable effects in killing nematodes and underground pests, and demand for carbamate pesticides has remained stable in the past two years. Global sales of urethane insecticides in 2017 were US$1.02 billion, accounting for 6.59% of the pesticide market, an increase of 0.4 PCT over 2016. Concerns about demand and environmental production restrictions have led to a contraction in corporate supply, and the share is concentrated on leading companies. The prices of the company's main products such as carbamyl and methodovir have continued to rise for the past 3 years. Accidents in the domestic chemical industry have been frequent recently, and safety and environmental inspections will surely be further strengthened. The tight supply pattern is expected to continue, and prices are expected to continue to operate at high levels. The company currently has a production capacity of 29,000 tons of original drugs such as Krobuvir. For every 1,000 yuan/ton price increase, the annualized increase can be about 22 million yuan, which is highly flexible in terms of performance. State-owned enterprise reforms reduced staff and increased efficiency, and production capacity was put into operation to drive growth. The company completed a fixed increase in 2018, raised 210 million yuan in capital to invest in the construction of new varieties of heterocyclic and high-efficiency and low-toxic pesticides. Projects were released one after another in 18-20, driving the company's steady growth in performance. The company's wholly-owned subsidiary, Hunan Chemical Research Institute, is one of China's 2 national pesticide creation engineering technology research centers. It has strong R&D capabilities, which will help the company to adjust and upgrade its product structure. The company's board of directors changed in 2015, and the management team paid close attention to reducing staff and increasing efficiency. The number of employees was significantly reduced, and the cost ratio dropped sharply during the period, resulting in an increase in net interest rate from 2.06% to 8.51%. The company is one of the first state-owned enterprises in Hunan to carry out state-owned enterprise reform. In 2018, 109 core members of the company set up an employee shareholding plan to subscribe for 5.0073 million shares of non-public shares at a subscription price of 7.53 yuan/share. We believe that introducing strategic investors and achieving employee shareholding can optimize the corporate governance structure, improve management efficiency, rationalize interests, and achieve a win-win situation for the company, employees and investors. For the first time, projects with fixed purchase ratings have been put into operation one after another. We believe the company will enter a period of rapid growth. The company's net profit for 2019-2021 is estimated to be RMB 1.85/2.53/299 million, respectively, and EPS of RMB 0.52/0.71/0.84, respectively. The current price corresponds to only 14 times PE in 2019 and 2.43 times that of PB2.43, which is lower than comparable listed companies and pesticide sectors. The company is a leader among global carbamate insecticides. The price of contracted supply products continues to rise, and performance flexibility is high; state-owned enterprises reform and reduce staff and efficiency, and operating efficiency continues to improve; fixed increase projects have been put into operation one after another, and future performance is expected to accelerate; the company was given 18 times PE in 19 years, with a target price of 9.36 yuan, giving it a purchase rating for the first time. Risk warning: product substitution risk, production safety risk, raw material supply risk