Key investment points Following the release of our first in-depth company report in 2018, along with the smooth integration of Baisheng International and the long-term impact of the COVID-19 pandemic on the company, the company has once again taken important strategic steps in the fields of protective products and structural heart disease. At the same time, after the company's continuous investment in high-end innovative medical devices in recent years, innovative cardiovascular device products are about to enter a harvest period. We launched the second in-depth company report. As the global COVID-19 pandemic continues, leading gloves have ushered in opportunities for volume and price increases. In 2019, the global demand for disposable gloves was nearly 500 billion, maintaining an annual growth rate of 8-10%. As the global COVID-19 pandemic continues, total demand for gloves is expected to increase permanently. Considering the high technical and capital requirements of gloves, it is difficult to release short-term production capacity quickly. Under the serious imbalance between supply and demand, glove prices continue to rise. The unit price of PVC gloves has increased about 4-5 times compared to before the pandemic, and the unit price of nitrile gloves has increased about 6-7 times compared to before the pandemic, which is expected to bring a significant increase in the company's performance. In addition, the company expects production capacity to expand to 19 billion PVC+6 billion nitrile by the end of 2020. In 2021-2023, the company also has a production capacity of 30 billion nitrile gloves that will be put into production one after another. The total annual production capacity of various types of gloves will reach nearly 60 billion, which is expected to become one of the top three companies in the world. Baisheng International has successfully integrated, and coronary products have reached the harvest stage. In 2020, the company achieved 100% ownership of Baisheng International. After years of R&D and clinical accumulation, the company's coronary product line is about to enter the harvest stage. Among them, Biofreedom, one of the most advanced metal scaffolds in the world, is expected to be approved by the FDA and NMPA around the end of 2020, bringing significant growth; the only domestic rapamycin drug balloon completed clinical enrollment in March 2020, and is expected to be approved in mid-2021; in the next 2-3 years, Xinyue II and Biofreedom II are expected to continue at home and abroad On the market, the coronary product pipeline is full of momentum. TAVR, the next golden race track in the cardiovascular field. The company has placed a strong position in the field of structural heart disease through epitaxial and self-research, acquired Swiss NVT to obtain mature TAVR products already marketed in Europe, and quickly entered the European market, which is in the golden development stage and the industry is growing by 10-15%. The company plans to simultaneously launch domestic and foreign clinical trials of second-generation fully recyclable TAVR in 2021 to achieve overtaking in the domestic market. At the same time, through independent research and development of mitral and tricuspid valve repair/replacement products, the company's overall layout in the field of structural heart disease is already at the forefront of the world. Profit forecast and valuation: We expect the company's revenue in 2020-2022 to be 77.43, 77.52, and 8.245 billion yuan, up 122.78%, 0.11%, and 6.36% year on year, and net profit of 28.64, 20.03, and 1,656 billion yuan, up 484.23%, -30.07%, and -17.34% year on year, corresponding to EPS of 2.97, 2.08, and 1.72. Currently, the company has a market value of 27.3 billion yuan. Considering that the volume and price of the company's glove business have risen sharply under the pandemic, the performance is expected to continue to exceed expectations. Innovative cardiovascular equipment products are about to enter the harvest stage. Using the segmented valuation method, we have a reasonable market value of about 50-60 billion yuan in 2020, maintaining a “buy” rating. Risk warning: risk of product marketing not meeting expectations, risk of policy changes, risk of product development failure, impact of fluctuations in glove prices, and risk of production capacity investment progress falling short of expectations.