Recommendation logic: After Xiong Wei, the company's new chairman, took office, corporate culture restructuring, refined investment, and sales system reform activated employee enthusiasm; the paste was a pre-cycle product of the aging disease spectrum, and overall revenue was basically unaffected by medical insurance fees; the company's marketing focused on products with high gross margin, and overall gross margin increased significantly; in the context of consumption upgrades, the company's other creams were significantly underestimated, and the replacement of hardcover with simplified packaging helped the value of the paste return. Looking at the global market, Japan is a major producer and marketer of patches, the US is a major consumer of patches, and Asia (particularly China) is a region with rapid growth in patches. According to the 2015 global patch market estimate, in terms of usage, the top two in the world were the US and Japan, respectively, while Asia was predicted to be the region with the fastest global growth rate of patches in the future. US Marketsand Markets predicts that the global market for transdermal drugs such as topical patches will increase from US$5.7 billion in 2018 to US$7.1 billion in 2023, but Asia (particularly China) will grow faster. Traditional Chinese medicine patches for orthopedic consumer products are pre-cycle products of the aging disease spectrum, and the growth rate of the industry will accelerate. Before 1962, about 13 to 15 million babies were born every year, but in the past ten years from 1962 to 1972, about 25 million babies were born every year. Among them, babies born in 1962 were 57 years old, and bone density dropped significantly after age 55, leading to a series of orthopedic diseases such as osteoporosis and fractures. In 2017, sales of topical ointments in retail pharmacies were 4.86 billion yuan, a year-on-year growth rate of 14.3%. Orthopedics is a pre-aging cycle, and the growth rate of the industry is bound to accelerate. Japan's Hisamitsu Pharmaceutical is the world leader in patches, with analgesic and anti-inflammatory patches as its main business and core competitiveness. Its annual revenue is nearly 9 billion yuan, while Lingrui Pharmaceutical's paste revenue is only about 1.4 billion yuan. China is fully aging, and there is huge room for it. Orthopedics has adjusted the pre-aging cycle into sports medicine and medical insurance catalogues, focusing on high-gross margin products for pain relief creams; with consumption upgrades, bone cream, joint pain cream, and revitalizing pain relief tincture, etc., will return value. The exclusive product, Channelow Pain Relief Cream, is a double cross of “medical insurance+basic medicine”. In 19, medical insurance reimbursement was changed from inpatient to outpatient clinics and pharmacies; creating a sports product portfolio of “Tongliao Pain Relief Cream+Active Blood Pain Relief Tincture”, predicting sales of 700 million in 2019, with a peak value of over 2 billion dollars. In 2018, plaster sales were about 1.6 billion yuan, with an average of about 0.8 yuan per sticker and 8 yuan per sticker for friends and merchants. There is huge room for consumption upgrades. A search from the JD terminal revealed that cream for bone strengthening, wetness, and joint pain was upgraded from simple to hardcover. The prices were 5 yuan and 25 yuan; 8 yuan and 35 yuan; 6 yuan and 25 yuan respectively; however, hardcover was still cheaper than that of friends and merchants; according to simplified packaging, the three together accounted for about 40% of the company's cream revenue. Earnings forecasts and ratings. The EPS for 2019-2021 is expected to be 0.54/0.68/0.86 yuan respectively (regardless of the impact of price increases). The company's performance growth rate is accelerating, orthopedic consumption attributes, and there is plenty of room for growth. Referring to comparable companies, the company was given 26 times PE in 2020, corresponding to the target price of 17.68 yuan, maintaining the “buy” rating. Risk warning: business integration or failure to meet expectations, product sales volume or failure to meet expectations, systemic risk