The company released its 2017 annual report. In 2017, the company achieved operating income of 4.974 billion yuan, an increase of 40.61% over the previous year, and realized net profit of 698 million yuan, an increase of 451.81% over the previous year. In 2017, the pesticide industry experienced the most severe environmental pressure in history, industry concentration increased, and the volume and price of the company's pesticide products rose sharply. Price perspective: paraquat rose from 14,000 yuan/ton to 22,500 yuan per ton (early '17 to end of '17, same below). After the company acquired Shandong Kexin, the industry concentration increased further; hemicloxide quickly rose from 50,000 yuan/ton to 60,000 yuan/ton; and chlorpyrifos rose from 33,000 yuan/ton to 49,000 yuan/ton. Production and sales perspective: The company's pesticide product production increased by 13.11%, sales volume increased by 15.90%, and inventory decreased by 21.33%. In 2018, the pesticide industry will carry out enforcement and inspection of sewage permits. Environmental protection is still tight. At the same time, downstream demand is gradually improving, agricultural commodity prices are rising, and the pesticide industry is expected to maintain a high level of prosperity. The new production capacity was successfully put into operation, and the pyridine industry chain has entered a period of rapid development. The company's newly put into production 10,000 tons of biochemical enemy grass fast (total of 12,000 tons after production), 10,000 tons of biochemical VB3 (total of 20,000 tons after production), and 25,000 tons of biochemical pyridine base (total of 82,000 tons after production) were all successfully put into operation, and the pyridine biochemical industry chain accelerated into a period of rapid development. The advantages of integrated pyridine industry chain are obvious, and product expansion has brought room for continuous growth to the company. The company has the entire pyridine industry chain from raw materials to intermediates to original drugs and pharmaceutical products to the terminal market, and has the advantages of circular economy and ecological protection. In order to solve the cessation of paraquat adhesive, on the basis of the existing industrial chain, the company increased the rapid production capacity of methamphetamine and accelerated the pace of development and industrialization of chloramidophos, L-oxamidine, and pyrazole ether mycelium. In addition, the company officially initiated the acquisition of Ruralco Argentina (the distributor of FMC, an important global pesticide company, in Argentina) to accelerate downstream expansion. We forecast the company's 2018/19/20 net profit of 892/9.81/1,123 billion yuan, and EPS of 1.54/1.69/1.93 yuan, corresponding to the current price of PE 14.1X/12.9X/11.2 times, giving it a “buy” rating. Risk warning: Product development progress falls short of expectations; environmental inspection intensity falls short of expectations