The ALCP base material project market is broad, and the localization process is expected to break through. LCP is a new type of high-performance special engineering plastic. The main application fields of the product include electronics, automobiles, medicine, etc. According to Zion Market Research forecasts, the global LCP market will reach US$1.45 billion in 2023, and the compound growth rate is expected to be 6.2% from 2016 to 2023. The company's LCP material products have the ability to participate in global technology. Since acquiring all of Samsung's LCP business in 2014, the company has continuously carried out market research and development and production lines. In 2018, the company's products were successfully approved by the Foxconn system. As the commercialization process of 5G equipment accelerates, the company's LCP products are expected to usher in a new breakthrough and replace imports. The acquisition of part of Deqing Cosai's shares has further strengthened its position as a leading enterprise in special polymer materials. The company acquired 51% of the shares of Zhejiang Deqing Kesai Plastic Products Co., Ltd. in early March 2019. Deqing Kesai is the leading fluorine-containing polymer material PTFE company in the industry. Its films for high-frequency equipment have already been mass-produced, which will increase the company's market share of materials for high-frequency and 5G equipment products. In addition, Deqing Cosai's chlorine-containing polymer resin materials will provide raw material support for the company's polymer materials for high-frequency equipment, help the company integrate industrial chain resources, enhance industrial chain innovation capabilities, and form product companion and industrial synergy effects with other special polymer materials deployed by the company. Falling raw material prices are expected to improve performance, and traditional businesses are growing steadily. The cost of raw materials for the company's main products accounts for more than 90% of the total production cost. Due to poor bargaining power in the modified plastics industry, gross margin has declined sharply since raw material prices rose sharply in the second half of 2016. With the decline in raw material prices in Q4 2018 and the lockdown of product prices, the company's gross margin will increase, and profits are also expected to improve. Profit forecast: The company is a leading LCP and PTFE material company in China. With the increase in demand for high-frequency base station PCBs and the volume of 5G-driven mobile terminal antennas, the net profit from 2019 to 2021 is expected to be 55 million, 86 million, and 135 million, respectively. The current stock price corresponding to dynamic PE is 47 times, 30 times, and 19 times, covering the first time, giving it an “increase in holdings” rating. Risk warning: Downstream demand falls short of expectations; LCP production expansion falls short of expectations.