Matters: The company's 2020 Q1 revenue was 4.7 billion, -34.0% year-on-year and -21.9% month-on-month. The net profit of 2020Q1 was $200 million, +4.4% year-on-year and +104.3% month-on-month. The 2020Q1 performance exceeded expectations. Methyl ethyl ketone was the main reason 1) In the Q1 quarter, the performance of most petrochemical industry companies declined, while the company's net profit was 200 million yuan, +4.2% year-on-year, slightly exceeding our expectations. Looking at specific products, the price spreads for the company's main products, propylene, maleic anhydride, MTBE, and MMA, all declined to varying degrees this quarter, while methylethyl ketone, as the company's most profitable star variety, had a Q1 price difference of 3,600 yuan/ton, +51% over the same period last year. 2) This quarter, foreign countries were less affected by the epidemic. In addition, Innix's butanone unit was shut down due to the fire, domestic butanone export orders increased sharply in March to March. Domestic butanone exports increased by 50% throughout the first quarter. The company is a leading enterprise in the methylethone industry, with a design capacity of 180,000 tons of methylethyl ketone, nearly half for export. Although the domestic market was seriously affected by the epidemic this quarter, we expect that the company will probably use the domestic sales to export strategy to expand the export volume of methethyl ketone. The high profitability of methethyl ketone made up for the decline in the company's other product profits, resulting in a slight year-on-year increase in overall Q1 performance. The company is actively advancing the progress of the project. It is expected that the MMA project will be put into operation by the end of the year 1) MMA project: the civil infrastructure of the project has been completed, the main installation is under construction, and is expected to be completed and put into operation in the fourth quarter of 2020 2) 700,000 tons of PDH and 300,000 tons of PO projects: 700,000 tons of PDH have now completed energy assessment, EIA, etc., and are breaking ground. Orders for some of the key equipment for the 300,000 ton PO project began. 3) Investment in isononanol projects: The company plans to invest in the construction of 200,000 tons of isononanol projects. After completion, the installation will further enhance the company's processing depth of carbon four raw materials. In a year of capital expenditure, debt leverage may rise further. 19/20/21 was a big year for corporate capital expenditure. Some of the capital for these new projects needed to be raised through bank loans. At the end of 2018, the company's short-term loan balance was only 2.08 billion yuan, and the long-term loan balance was 0. This quarter, the company's short-term loan balance was 4.17 billion yuan, an increase of more than 2 billion dollars, and the long-term loan balance was 610 million yuan. The increase in short-term and long-term loans has also raised the company's capital debt ratio from 35% in 2018 to 45% now. Profit forecast and valuation: Maintain the company's 20/21/22 performance forecast to 5.0/7.7/1.37 billion yuan, EPS 0.28/0.43/0.77 yuan. The current stock price corresponds to PE 21/14/8 times, maintaining the “increase in holdings” rating. Risk warning: risk of oil prices continuing to fall; risk of continued spread of the epidemic; risk of construction projects falling short of expectations