Event: The company announced its 2019 annual report, achieving operating income of 3.476 billion yuan, a year-on-year increase of 31.00%, net profit of 490 million yuan, a year-on-year increase of 41.41%, and a net profit of 473 million yuan after deducting non-net profit of 473 million yuan, an increase of 21.98% year-on-year. At the same time, the company announced the 2020 Q1 forecast, which is expected to achieve net profit of 1.44-154 million yuan, an increase of 50-60% over the previous year. Glove stents grew steadily in 2019, and the 2020Q1 pandemic benefited slightly more than expected. The company's overall rapid growth in 2019 was mainly due to Baisheng International's merger. Among them, the 2019Q4 quarter achieved operating income of 877 million yuan, a year-on-year increase of 2.00%, net profit of 115 million yuan, an increase of 33.60% over the previous year, and non-net profit of 127 million yuan, an increase of 12.73% year-on-year, mainly due to the significant increase in net interest rate brought about by the increase in the share of support business with high gross margin. The overall net profit ratio was 14.95%, up 1.56pp year on year. 2020Q1 was affected by the domestic epidemic, and the company's demand for protective equipment, gloves, masks, etc. increased dramatically. At the same time, the price of gloves gradually rebounded after bottoming out in 2019, and performance achieved rapid growth, slightly exceeding market expectations. Glove prices bottomed out in 2019, demand for protective products increased under the COVID-19 pandemic, and the gloves business is expected to rise in volume and price. In 2019, the company's glove business was affected by factors such as cyclical fluctuations in PVC glove prices and Q1 environmental production restrictions, and achieved revenue of 1,678 billion yuan, an increase of 4.95% over the previous year. Among them, the price of PVC gloves was affected by tariffs imposed on the US and continued to be at the bottom, leading to a gross profit margin of 15.30% and a year-on-year decrease of 8.61 pp. In 2020Q1, due to the impact of the COVID-19 pandemic in China and the reduction in tariffs on the US, gloves are expected to achieve net profit of nearly 100 million yuan, and with the spread of the overseas epidemic, prices of PVC and nitrile gloves continue to rise. At the same time, the company's 4 billion new PVC gloves are expected to be officially put into production in 2020, and 2 billion nitrile gloves are expected to be officially put into production in 2020Q4, leading to a sharp rise in the overall glove business volume and price. The annual performance is expected to exceed expectations. The stent business has maintained steady growth, and the deployment of cutting-edge products such as heart valves has brought long-term sustainable competitiveness. The company's cardiac intervention business achieved revenue of 1,737 million yuan and net profit of 462 million yuan in 2019. Its domestic market achieved revenue of 824 million yuan, and stent implant sales increased by more than 18% during the same period. In addition, the company is developing various drug balloons, cobalt-chromium alloy Biofreedom, mitral valve replacement, etc. with great market potential. At the same time, it plans to use 1.39 billion yuan to acquire the world's leading NVT in the TAVR field, which is expected to maintain long-term sustainable growth. Profit forecast and valuation: According to the 2019 annual report, we have adjusted our profit forecast. It is estimated that in 2020-2022, the company's revenue is 62.97, 57.73 billion yuan, 6.417 billion yuan, a year-on-year increase of 81.17%, -8.33%, and 11.16%, and net profit of 11.20, 9.93, and 1,122 billion yuan, a year-on-year increase of 128.46%, -11.39%, and 13.04%, corresponding to EPS of 1.16, 1.03, and 1.16. Currently, the company is corresponding to 15 times PE in 2020. Considering that the company's low-value consumables+high-value consumables are growing steadily and its long-term competitiveness continues to improve, the mid-term glove business is expected to continue to exceed expectations under the sharp rise in volume and price, maintaining a “buy” rating. Risk warning: risk of product marketing falling short of expectations, risk of policy change, risk of product development failure, impact of fluctuations in glove prices.