Guide to this report: The 2019 performance maintained steady growth, with remarkable fee control effects, significant improvement in profitability, steady and progressive layout of new growth points, and there is still plenty of room for improvement in valuation. Key investment points: Maintain an increase in holdings rating. The 2019 performance grew steadily, in line with market expectations. Profitability was further improved, and the fee control effect was outstanding. In 2020, we will continue to focus on the main business, and steadily advance to explore new growth points. Valuation is at a low level, and there is plenty of room for improvement. According to the 2019 performance report, considering the impact of the 2020 epidemic, the 2019-2020 EPS was slightly revised to 2.01 (+0.03) and 2.06 (-0.04), maintaining the 2021 EPS of 2.20 yuan, and maintaining the target price of 40 yuan, corresponding to the 2020 19 XPE. The 2019 results maintained steady growth and were in line with expectations. The company released a quick performance report. In 2019, it achieved operating income of 2.85 billion yuan/year on year, net profit of 1,236 million yuan/year on year +5.09%, and profit level close to the upper limit of the performance forecast; Q4 achieved revenue of 688 million yuan/year on year -2% in a single quarter, and net profit to mother of 402 million yuan/year on year +3%. The fee control effect is obvious, and profitability has been further improved. The company's revenue stabilized, but profitability increased significantly. The net interest rate increased by 2.33pct to 56.54% in 2019, mainly due to strict control of expenses, and a significant improvement in overall operating efficiency. Steady and progressive layout of new growth points, and there is plenty of room for valuation improvement. It is expected that the company's main business, tobacco flavors, will continue to grow steadily. Continued promotion of the Heated Non-Combustion (HNB) pilot is expected to further release demand for tobacco flavors. Benefiting from HNB technology in the future, the tobacco essence sector is expected to achieve rapid growth, while continuing to expand new businesses such as food flavors and food ingredients is expected to contribute new growth points. Currently, the company corresponds to the 2020 14XPE and is at a low level, and there is still plenty of room for valuation improvement. Risk factors: increased industry competition, food safety risks, etc.