The 19-year annual report was released. Net profit for the 19th year fell -786.08% year on year. Total operating income in 2019 was about 418 million yuan, down 10.02% year on year; realized net profit of 59 million yuan, a year-on-year decrease of -786.08%; net profit after deduction was -61 million yuan, down -3000% year on year. Due to falling production and prices, the company's performance fell short of our previous expectations. The company's production capacity of germanium metal and related components is at the forefront of the industry, and is actively deploying second-generation semiconductor materials such as gallium arsenide and indium phosphide. The company's EPS is expected to be 0.1, 0.2, and 0.41 yuan in 20-22, maintaining the company's “increased holdings” rating. Product production and sales prices declined, assuming an increase in gross profit. Due to changes in the international and domestic economic situation, sales prices and sales of major products fell year-on-year in 2019. The decline in sales volume affected total revenue of 37,2621 million yuan. Among them, infrared-grade germanium products fell 42.54%, fiber-grade germanium products fell 25.04%, photovoltaic-grade germanium products fell 52.52%, etc.; the price decline affected total operating income of 11.619,500 yuan. Among them, material-grade germanium products fell 27.21%, infrared germanium products fell 17.46%, and fiber-grade germanium products fell 17.46%, and fiber-grade germanium products fell 17.46% 6.13% Gross profit of 66.9585 million yuan was achieved in 2019, compared with 97.21555 million yuan in 2018, a decrease of 30.257 million yuan. Furthermore, the decline in prices led to asset impairment preparations of $13.622 million, an increase of $11.0819 million over 2018. There was a slight increase in company expenses and total expenses during the period of asset disposal losses of about 112 million yuan, an increase of about 20% over 2018; mainly, sales expenses, financial expenses, and R&D expenses increased by about 0.3 billion yuan, 10 million yuan, and 100 million yuan respectively, and management expenses remained basically the same. In addition, asset disposal income was 1,5863 million yuan, an increase of 2.293 million yuan over 2018. The main reason was the loss of 5.372 million yuan in asset disposal due to the disposal of mining rights in the Meiziqing mine in accordance with relevant regulations. 2020 The company plans to significantly increase the production of germanium components and semiconductor materials. 2020, the company plans to drive new product development with high-quality customers, increase the marketing of downstream products such as infrared series products, high-efficiency germanium single chips for solar energy, gallium arsenide single chips, indium phosphide single chips, and optical fiber germanium tetrachloride; make full use of the obtained military certification qualifications and actively participate in military market competition. Produced 26.5 tons of germanium material grade products, 6.5 tons of infrared germanium products, 272,000 sheets of photovoltaic grade germanium products, 26 tons of fiber-grade germanium products, 26 tons of fiber-grade germanium products, and 32.29 million pieces of non-germanium semiconductor material grade products; production of various products increased by about 3%, 44%, 41%, 257% and 349% over 2018. The rapid growth of germanium deep processing and semiconductor materials has maintained the company's “increased holdings” rating. Production of germanium components and semiconductor materials has increased rapidly. Profit forecasts have been raised. The company's revenue for 20-22 is expected to be 6.82, 8.23 and 1,092 billion yuan, respectively, net profit of 0.64, 1.31 and 270 million yuan, and net profit increases of 12% and 22% in 20-21, respectively, corresponding to PE 98, 48, and 23 times, respectively. Using segmented valuation, the valuation of germanium resources was consistent with the previous valuation, with 2.2 times PB, corresponding market value of about 3.1 billion; net profit of germanium components and semiconductor materials in 20 years was about 220 million and 37 million, referring to the 20-year average PE of the same industry, 56 times and 131 times, respectively, giving the 20-year PE valuation of 50-55 times and 65-70 times, respectively; the total target market value was 65.05-6.79 billion yuan. The target price range was 9.96-10.40 yuan (previous value was 9.14-9.66 yuan). Maintain the company's “increase in holdings” rating. Risk warning: Germanium prices are falling; downstream development such as 5G falls short of expectations; and the engineering progress of GaAs second-generation semiconductor materials falls short of expectations, etc.