The market share of aluminum grain refining agents exceeds 40%, and the industrial chain is gradually expanding. The company is the only aluminum grain refining agent manufacturer in the industry with a complete industrial chain. It is ahead of the industry in technology and scale, with a market share of 40%. The business covers upstream fluorite mining, hydrofluoric acid production, fluorine salt manufacturing, and aluminum grain refining agent production. The company has a wide range of downstream customers, which basically cover mainstream aluminum manufacturers. In July 2019, the company's aluminum grain refining agent production capacity increased from 60,000 tons to 90,000 tons, and production capacity increased significantly. At the same time, the company's production capacity of 30,000 tons in Shenzhen will be relocated to Luoyang, reducing environmental risks and reducing transportation and production costs. Potassium tetrafluoroaluminate brings a new market for power saving. The production of aluminum grain refining agents will produce potassium hexafluoroaluminate, a by-product. Through research and development, the company can use potassium hexafluoroaluminate as a raw material to prepare potassium tetrafluoroaluminate, while potassium tetrafluoroaluminate as an aluminum electrolytic additive can cause the electrolysis working temperature of the aluminum electrolysis production process to drop, and the current efficiency increase by at least 2%, making the production of at least 500 degrees of electricity per ton of aluminum. We believe that the profit of the electrolytic aluminum industry is weak. The power saving benefits of potassium tetrafluoroaluminate will quickly drive its market demand. In 2018, China produced more than 35.8 million tons of electrolytic aluminum, and the potential demand for potassium tetrafluoroaluminate was greater than 360,000 tons. According to the estimated price of 10,000 pieces per ton, the market space was increased by 3.6 billion yuan. In the future, as potassium tetrafluoroaluminate is accepted by more and more electrolytic aluminum manufacturers, the prosperity of the industry will increase. Potassium tetrafluoroaluminate has a high preparation barrier. ① Cost advantages: If KF and AlF3 are used to synthesize KalF4, the cost is about 21,000 yuan, and the price of the company producing KalF4 through the K3AlF6 melting method is only 10,000 yuan; ② Technical advantages: Potassium hexafluorochlorate to potassium tetrafluoroaluminate is technically difficult, requires high-power electromagnetic induction furnaces, complexes and anti-polymerization agents, many company patents, and deep technical barriers; ③ Raw material advantages: The preparation of potassium tetrafluoroaluminate requires raw material potassium fluorotitanate, and due to environmental factors, most of the country's potassium fluorotitanate production capacity comes from Shenzhen Xinxing (The current production capacity of 60,000 tons is expected to increase to next year 100,000 tons). We believe that with the deepening of environmental inspections and the improvement of environmental standards, it is unlikely that potassium fluorotitanate will increase production capacity in the future, and the company's raw material advantages are obvious. The commencement of production of the high-purity hydrofluoric acid project and the SB powder project will drive profits to continue to increase. The company's electronic grade hydrofluoric acid project is currently manufacturing equipment and building production lines. Electronic-grade hydrofluoric acid is mainly used for the cleaning and corrosion of integrated circuits, with a gross margin of more than 50%. At the same time, the company's technical path for preparing SB powder for petroleum cracking catalysis through hydrofluoric acid is high. Currently, SB powder is mainly monopolized by Germany, and if the company's SB powder is put into production, it will bring huge domestic replacement space. Profit forecast: The company is a leader in aluminum grain refining agents. In 2019, it started production capacity of 30,000 tons of aluminum grain refiners, and its main business is expected to continue to grow. At the same time, with its high-barrier potassium tetrafluoroaluminate preparation process, the company is expected to quickly open up the market in the field of electrolytic aluminum power saving. We expect the company's net profit in 2019-2021 to be 1.9/2.7/380 million yuan, corresponding to EPS of 1.21/1.71/2.36 yuan/share, and corresponding PE of 24.5X/17.4X/12.6X, covering the first time, giving it a “buy” rating. Risk warning: Sales price risk of aluminum grain refining agents, sales of potassium tetrafluoroaluminate fell short of expectations, and other manufacturers mastered the synthesis technology of potassium tetrafluoroaluminate.