Key investment points Jiangsu Brothers Vitamin Production is about to resume, and there is a possibility that VB1 prices will rise: The comprehensive treatment of the Jiangsu Coastal Chemical Park has entered the final stage. Currently, Jiangsu Brothers has received approval from the Yancheng Municipal People's Government Office and agreed in principle to resume production of Brother Vitamins's 3,200 tons/year vitamin B1 project, 1,000 tons/year beta-aminopropionic acid project and related supporting facilities. We expect Brother Vitamins to be produced gradually and in an orderly manner in the near future. Since the Jiangsu Brothers were unable to operate normally for two years, industry inventories were low, and production in Huazhong Pharmaceutical and Tianxin Pharmaceutical was abnormal due to the outbreak of the Hubei epidemic, the VB1 price increase was quite certain. There is a possibility that the price of VK3 will rise. K3 will produce a large amount of toxic chromium slag. The company has successfully solved the problem of comprehensive utilization of chromium slag through the development of the chrome tanning agent industry. The company is also one of the few domestic enterprises that can recycle hazardous waste containing chromium from tannery. Currently, most domestic VK3 companies are unable to produce normally due to the epidemic or problems with the comprehensive utilization of chromium slag, and the VK3 price increase is quite certain. The acquisition of CISA opens up the possibility of integrating the VK3 industry. China is the world's largest producer of chromium salt, yet its external dependence on chromium ore is as high as 96%. At the end of '19, the company successfully acquired CISA. CISA is located in Johannesburg, South Africa. Its main assets are nearly 100,000 tons of chromium salt, and the net profit center is about 100 million yuan. New production capacity was gradually launched at the Isoyama base. The Isoyama base mainly has thermoelectric power, 13,000 tons of niacinamide, and a 5,000 ton calcium pantothenate project. With the completion of the Isoyama Park renovation, the load gradually increased. Meanwhile, the production capacity of the phenylene diamine, derivatives, and iodine contrast agent industry is about to be released. The Isoyama base's long-term planning is remarkable. The Ishiyama base is the company's most important production base. 1,500 acres of land have been reserved in the long term. According to information on the government website, the main projects that have entered the government reporting stage include 13,000 tons of VB3, 4,000 tons of VK3 (60,000 tons of chrome tanning agent), 33,000 tons of fragrance, and 900 tons of pharmaceutical raw materials. Profit forecast and investment rating: We expect the company's revenue from 2019 to 2021 to be 1,239 billion yuan, 2,619 billion yuan, and 3.291 billion yuan, respectively; net profit to mother will be 43 million yuan, 346 million yuan, and 438 million yuan respectively; EPS will be 0.05 yuan, 0.38 yuan, and 0.49 yuan respectively. The PE corresponding to the current stock price is 126X, 16X and 13X, respectively. Based on expectations for the resumption of production at the Jiangsu base and production capacity investment at the Ishiyama base, coverage was given for the first time, and a “buy” rating was given. Risk warning: Production capacity investment for new projects is progressing slower than expected. The COVID-19 outbreak has led to a shortage of global demand.