The performance was in line with expectations. The company released its 19th mid-year report. In the first half of the year, it achieved revenue of 987 million yuan, a year-on-year increase of 57.22%, net profit of 23 million yuan, a year-on-year increase of 37.79%, and an EPS of 0.06 yuan. The performance was in line with expectations. The company estimated impairment losses at the Guixi factory to reduce net profit by 69.62 million yuan. Excluding this impact, the company's net profit for the first half of the year was 9.51 million yuan, a sharp increase of 457% over the previous year. The increase in product prices and the launch of new production capacity brought about a sharp increase in revenue. The company's revenue increased sharply in the first half of the year, mainly due to the sharp rise in volume and price of original products and the release of production capacity for new products. The sales volume of the company's core product, kabavir, increased by 38.9%, the price increased by 23.7%, the sales volume of xanavir increased by 24.5%, the price increased by 44.2%, and the sales volume of menavir fell by 37.5%, but the price increased by 21.4%. Sulfur dioxidedovir was put into production in the 2nd quarter, with sales volume of 711 tons and a price of 155,200 yuan/ton, up 18.6% year on year. Profitability continued to improve. The gross profit margin for the first half of the year rose 26.4% year on year to 3.56PCT, and the period expense ratio of 13.04% decreased by 3.28 PCT year on year; operations remained stable, with an inventory turnover ratio of 2.31 and a receivable turnover ratio of 6.73, all of which improved markedly over the previous year. The net operating cash inflow in the first half of the year was 80.5 million yuan, up 442% year on year. Staff reduction and efficiency increased, reforms stimulated vitality The management team paid close attention to staff reduction and efficiency. The number of employees fell sharply from 2,346 in '16 to 1,837 at the end of '18, and the per capita remuneration increased by 57% over '16. Three system reforms have been fully implemented. The organizational structure of the headquarters has been reduced from 17 to 9, and functional departments are co-located; the company headquarters has implemented a competitive employment system for all employees, and all relevant positions in all functional departments have already been contested to perform their duties. In 2018, the company established an employee stock ownership plan to subscribe to the company's non-public shares and introduce strategic investors to optimize the equity structure. It is hoped that the effects of the reforms will gradually be reflected. New production capacity has been put into operation one after another, and will continue to grow in the future. The company will give full play to the advantages of the Hunan Chemical Research Institute's technology platform. In the first half of the year, it applied for 4 invention patents and obtained 5 new invention patent authorizations. The progress of the heterocyclic pesticide project is 87%, the remaining products will be put into production one after another, and the construction of the Guixi Company's new thiophosphorus area is progressing at an accelerated pace. As new projects are put into operation one after another, the company is expected to maintain steady growth in the future. Profit forecasting and investment proposal fixed growth projects have been put into operation one after another. We believe that the company will enter a period of rapid growth. The company calculated impairment losses, so the net profit forecast for 2019 was lowered. The company's EPS for 2019-2021 is expected to be 0.32/0.70/0.83 yuan respectively (previous values were 0.52/0.71/0.84 yuan, respectively). The current price corresponds to 19.23 times PE and 1.87 times PB1.87 times in 2019. The company is a leader in carbamate pesticides in the world. Prices of products with reduced supply continue to rise, and performance is flexible; state-owned enterprise reforms have reduced staff and increased efficiency, and operating efficiency has continued to improve; fixed increase projects have been put into operation one after another, and future performance growth is expected to accelerate. Maintain the buy rating. Risk warning: product substitution risk; production safety risk; raw material supply risk;