Event: The company announced its 2020 quarterly report, achieving operating income of 897 million yuan, a year-on-year increase of 7.33%, net profit of 145 million yuan, a year-on-year increase of 50.73%, and non-net profit of 133 million yuan, an increase of 63.94% over the previous year. Protective products such as gloves have benefited from the sharp spread of the epidemic, and the scaffolding business has been under pressure in the short term. 2020Q1 was affected by the domestic epidemic, and the company's demand for protective equipment, gloves, masks, etc. increased dramatically. At the same time, gloves prices gradually rebounded after bottoming out in 2019, and performance achieved rapid growth. At the same time, Baisheng International's stent business sales in China were affected by the epidemic. With the exception of acute patients, stent implantation was limited. Beginning in the second quarter, as the domestic epidemic eased, it has now recovered one after another. Due to a sharp increase in the share of low gross margin gloves in the revenue structure, a comprehensive gross profit margin of 41.30%, a year-on-year decrease of 1.05pp, a year-on-year decrease of 1.05pp, a year-on-year decrease of 21.85%, and a year-on-year decrease of 6.56pp. Among them, the financial expense ratio declined a lot, mainly due to the increase in exchange earnings. The company's overall net profit margin was 16.58%, up 4.47pp year on year, and profitability increased significantly. With the launch of new production capacity, increased prices under the pandemic, and lower tariffs on the US, the glove business ushered in an increase in volume and price in 2020. 2020Q1 has been affected by the COVID-19 pandemic in China, compounded by falling tariffs on the US. The gloves are expected to achieve net profit of nearly 100 million yuan, a year-on-year increase of nearly three times, and with the spread of the overseas epidemic, PVC and nitrile gloves prices continue to rise. At the same time, the company's 2.5 billion PVC gloves per year were successfully put into production at the end of April, 1.5 billion PVC gloves per year and 2 billion nitrile gloves are expected to be officially put into production in 2020Q4, leading to a sharp rise in overall glove business volume and price, and annual glove profits are expected to exceed expectations. The stent business is under pressure in the short term, and the deployment of cutting-edge products such as heart valves brings long-term sustainable competitiveness. The company's cardiac intervention business 2020Q1 was affected by the domestic epidemic. Profit fell by about 20% year on year, and is currently recovering gradually. Considering that the major variety BioFreeDom is expected to be approved for listing by the FDA in the second half of 2020, Baisheng International's annual results of about 540 million yuan are expected to be completed. At the same time, the company's convertible bonds plan to acquire NVT, a scarce European interventional valve company, which is expected to maintain long-term growth momentum. Profit forecast and valuation: We expect the company's revenue in 2020-2022 to be 62.97, 57.73, and 64.17 billion yuan, up 81.17%, -8.33%, and 11.16% year on year, and net profit of 11.20, 9.93, and 1,122 billion yuan, up 128.46%, -11.39%, and 13.04% year on year, corresponding to EPS of 1.16, 1.03, and 1.16. Currently, the company is corresponding to 14 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.