Event: The company released its performance forecast for the first quarter of 2018. Net profit is estimated at 250-280 million yuan, an increase of 58.21%-77.19% over the previous year. Comment: The new production capacity started successfully, and the pyridine industry chain has entered a period of rapid growth. The company's newly put into production 10,000 tons of biochemical enemy rapid (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 launched, and the pyridine biochemical industry chain entered a period of rapid growth. The increase in performance mainly comes from price increases due to supply-side reforms and increased concentration. Prices of the company's main pesticide products have risen significantly: due to the company's acquisition of Shandong Kexin, the concentration of paraquat has further increased, and the 42% mother liquor price remains high at 22,500 yuan/ton; the price of paraquat is gradually replacing paraquat, rising to 60,000 yuan/ton (50,000 yuan/ton in early '17); and chlorpyrifos has risen to 49,000 yuan/ton (33,000 yuan/ton in early '17). The price of VB3 was under pressure for a short period after the production capacity of the company and Brother Technology was put into production, but the competitive pattern of oligopoly did not change, and the company's ability to control prices increased after the production capacity of 10,000 tons was put into production. With the advantages of integrated pyridine industry chain, product expansion brings 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 Argentina's Ruralco (the distributor of FMC, an important global pesticide company, in Argentina) to accelerate downstream expansion. Investment advice: We are optimistic about the integrated advantages of the company's pyridine alkali industry chain. Product expansion brings room for continuous growth to the company. We forecast that the company's net profit for the year 17-19 was 7.0/9.2/1.1 billion yuan, and EPS 1.2/1.6/1.9, corresponding to the current stock price PE 16X/12X/10X, giving it a “buy” rating. Risk warning: Product development progress falls short of expectations