Event: The company released its 2020 mid-year report. 20H1 achieved revenue of 816 million yuan, net profit of 219 million yuan, and net profit of non-return net profit of 208 million yuan, year-on-year increases of 38%, 92%, and 96%, respectively, and achieved basic EPS of 0.49 yuan and diluted EPS of 0.47 yuan, in line with market expectations. Comment: Revenue and profit in a single quarter in 20Q2 reached record highs, and the main varieties are expected to continue to grow. Quarterly revenue from 19Q2 to 20Q2 was 2.97, 3.74, 3.87, 3.67, and 449 million yuan, respectively, and net profit of 0.61, 1.02, 0.90, 0.84, and 135 million yuan respectively. The revenue and profit for the single quarter reached new highs. The reason is that the normal resumption of work, new anti-virus business contributions, and the increase in demand brought about by the pandemic and contraction in overseas supply have led to a sharp rise in the average price of the company's main varieties. Specifically, 1) the production of the 20Q2 company is on the right track; 2) the global spread of the epidemic has increased demand for antibiotics and antiviral drugs. As high-end antibiotics, demand for batans and penemens is more elastic. Additionally, the volume and price of Aotong's antiviral products have also risen sharply; 3) At the beginning of March, the Indian government restricted the export of 13 types of APIs and corresponding preparations, mainly antibiotics, antivirals, and vitamins. In terms of specific varieties, we estimate that the revenue of the 20H1 penem category increased by about 200% year over year, and the revenue of tazobactam increased 33% year over year. Furthermore, the company's new production capacity in Bataan is expected to be put into operation in October, construction of the new production capacity in Peinan is underway, and the company's main products are expected to continue to be released. Deeply cultivate the antibiotic and antiviral industry chain, and continue to expand vertically and collaboratively horizontally. The company is strengthening its main business advantages in antibiotics and antiviral APIs by expanding product lines, building production capacity, and expanding horizontally. New inhibitors such as AAI101 and avibatan are expected to be released in the future. The integration of APIs and formulations continues to advance. The injection workshop in Dalian passed GMP certification in November '19, and agatriban injections were approved for production in July '20. In addition, the aseptic powder mixing project is progressing at an accelerated pace, and it is expected that relying on the advantages of tazobactam, it will expand horizontally into product lines such as piperacillin. Profit forecast and investment rating: The company has significantly benefited from the increase in demand brought about by the pandemic and the contraction in industry supply, and its performance will continue to grow at a high level. We maintain our 20-22 EPS forecast at 0.89/1.09/1.27, an increase of 35%/22%/16% over the previous year. The current price corresponding to 20-22 PE is 22/18/16 times, maintaining the “buy” rating. Risk warning: product price reduction risk; raw material price increase risk; environmental protection and production safety risk.