The performance company released its 2019 annual report. In 2019, the company achieved revenue of 5.369 billion yuan, a year-on-year decrease of 4.19%, and net profit of 1,227 billion yuan, an increase of 11.52% over the previous year. The analysis benefited from the oleochemical and sulfonated pharmaceutical business, and the company's profit level increased markedly. Benefiting from the company's previous layout of the 160,000-ton multi-fatty alcohol (acid) project and the 38,000-ton TA series product technical improvement project, the company expanded product range in the field of oleochemicals and sulfonated pharmaceuticals and carried out an extended product layout for the industrial chain. Through the increase in sales volume of high-value-added products and products, while taking advantage of production capacity and technical advantages, the company continued to consolidate its competitive strength in various segments and enhance its market influence. In 2019, the operating profit of the company's two types of business increased by 41% and 59% year-on-year respectively, driving the company's profit to increase. Build a circular integrated industrial chain and form a good foundation for diversified industrial layout. After years of improving the business layout, the company has formed a self-heating power base, and through sulfuric acid and caustic soda, the industrial chain extends to sulfonation pharmaceutical business and grease chemical business, forming a circular integrated industrial chain layout to meet large-scale industrial support needs, and has strong cost advantages. In terms of sales of steam and basic chemical raw materials, it enhances customer stickiness through mutual promotion, reduces sales costs, reduces risks, and relies on park and layout advantages. The company has formed an internal and external cycle, and its competitive advantage is difficult to replicate. The new construction project continues to improve existing production lines and drive the company's further development. At the end of 2018, the company began to lay out 300,000 tons/year dichloroethane and vinyl chloride projects and 300,000 tons/year functional polymer materials projects, using by-product chlorine to achieve an extended layout of new products and improve the existing industrial chain layout; in the field of sulfonation pharmaceuticals, the company is the largest sulfonation intermediate enterprise with technical advantages in China, accounting for 60% of the market share. Through 4,000 tons/year BA and other projects, the company will further strengthen the company's market advantage in the sulfonation field to provide room for business development ; In terms of hydrogen energy business, the company has an industrial by-product hydrogen base, low product costs, sufficient supply, and geographical advantages. The collaborative layout with enterprises related to the industry chain is expected to drive the company's performance growth in the long term. The investment suggests that the company has relied on thermal power and acid-base production lines for many years and has continuously expanded its business to form a circular industrial chain layout. The layout of the new PVC project, sulfonation pharmaceutical project, and hydrogen energy business will continue to support the company's steady development. Considering the impact of the epidemic on terminal demand, the company's net profit in 2020 was lowered by 7.5%, and predicted that the company's EPS in 2020-2022 would be 0.85, 1.14, and 1.25 yuan, respectively, and the corresponding PE would be 10.7, 8.0, and 7.3 times, maintaining the “increase in holdings” rating. Risks indicate the risk that new construction projects will not meet expectations; the risk that the growth rate of demand for sulfonated pharmaceuticals will slow down; policy risks related to hydrogen energy; and the risk that the epidemic at home and abroad will affect downstream demand, causing sharp fluctuations in product prices.