Event 1: the company announced the investment project "annual production of 8000 tons of photosensitive new materials project" recently passed the fire inspection and acceptance, the relevant supporting facilities are complete, with trial production conditions, will enter the trial production commissioning stage.

Event 2: the company released its three-quarter report in 2019, with an income of 601 million yuan, an increase of 37.26% over the same period last year, and a net profit of 73.26 million yuan, an increase of 98.26% EPS 0.38 yuan per share.

Ink continued high prosperity, performance in line with expectations. The company achieved revenue of 601 million yuan in the first three quarters of 19 years, up 37.26% from the same period last year. The substantial increase in the company's income is mainly due to the steady development of the ink business and the large increase in the paint business. and the company realized Hunan Sunshine in October 2018, Dongguan Hangsheng in January 2019 and received government subsidies and debt restructuring profits totaling 12.91 million yuan. In the first half of the year, the company achieved 239 million yuan in revenue from the paint sector, up 71.3% from the same period last year, and 1.58 billion yuan from the special ink sector, up 4.83% from the same period last year. The company's gross profit margin in the first three quarters was 38.07%, down 0.02% from the same period last year; sales expenses were 51.51 million yuan, up 26.68% from the same period last year; management expenses were 66.15 million yuan, up 37.90% from the same period last year; R & D expenses were 28.91 million yuan, up 40.2% from the same period last year; financial expenses were 5.39 million yuan, up 1.81 million yuan from the same period last year; the rate of expenses for the period was 25.27%, down 0.48% from the same period last year; and the net profit rate was 12.18%, which increased 3.74PCT over the same period last year. In the third quarter of 19, the revenue in the third quarter was 195 million yuan, up 31.93 percent from the same period last year and 1.56 percent from the previous quarter; the net profit in the third quarter was 20.8965 million yuan, up 245.32 percent from the same period last year and 13.27 percent from the previous quarter; and the net interest rate in the third quarter was 10.40 percent higher than the same period last year, increasing 6.59PCT and 1.03PCT.

The company has formed a common development pattern of ink, professional paint and new energy materials to support steady growth of performance. The company expands its business areas and product structure, Dongguan Hangsheng focuses on the development of high-performance lithium electronic battery electrolyte, the company acquires it to enter the new energy field, while its subsidiary Jiangsu Hongtai acquires Hunan Sunshine to develop UV new materials business. The advent of the 5G era will bring business opportunities for the company, the company is the leading domestic paint and ink manufacturing companies, the company's wholly-owned subsidiary Jiangsu Hongtai Huawei and OPPO smartphone paint suppliers, and the company pays attention to research and development, the newly developed products include inks and coatings for 5G communications, due to the high-speed and high-frequency characteristics of 5G, the requirements for PCB boards will be increased, so it is predicted that the demand for PCB inks will increase. And under the promotion of strict environmental protection, traditional coatings are expected to be eliminated quickly because of serious pollution. The company's light-cured coatings will get new applications according to their environmentally friendly and convenient characteristics, and the plate has great potential for development.

The construction of the new photosensitive material project has been completed, and the growth is expected to become a leader. The company's IPO investment project "annual output of 8000 tons of photosensitive new materials project" has been completed, and through the project acceptance is about to enter the commissioning stage. The company now has an annual production capacity of 6500 tons of ink, ranking first in China, and is now full of production and sales. The launch of the new project will effectively break through the capacity bottleneck and meet customer demand. After the project is put into production, the scale effect brought about by capacity expansion will further reduce the unit production cost, which will help to improve the company's market competitiveness and profitability, and will have a positive impact on the company's future business performance. At present, there is basically no new production capacity for 19 years. Next year, with the gradual improvement of production capacity, the improvement of equipment and technology will greatly improve the product quality of the company, the company will continue the growth path, and the ink market share is expected to be further improved.

Maintain the "prudent recommendation-A" investment rating. We expect the company to achieve revenue of 818 million, 1.054 billion and 1.314 billion in 19-21, net profit of 107 million, 133 million and 163 million respectively, EPS of 0.55,0.69 and 0.85 yuan, PE of 32.5,26.1 and 21.3 times respectively, maintaining the "prudent recommendation-A" investment rating.

Risk hint. The risk of whether the new production capacity can successfully open up the market; the risk of fluctuations in raw material prices; the risk of intensified competition.