Performance summary: The company released its 2020 three-quarter report. In the first three quarters, it achieved operating income of 2.35 billion yuan, a year-on-year decrease of 2.6%; realized net profit to mother of 580 million yuan, an increase of 4.9% over the previous year; realized net profit without return to mother of 520 million yuan, an increase of 3.6% over the previous year, and EPS was 0.66 yuan. Performance grew steadily, and expenses were well controlled during the period. In the first three quarters of 2020, the company's overall performance maintained steady growth, with a gross profit margin of 90.2%, a year-on-year decrease of 2pp. In terms of the period expense ratio, the sales expense ratio was 47.5%, the management expense ratio was 9.8%, and the financial expense ratio was -0.8%. The overall cost rate for the period was well controlled. Compecip has great potential and can be expected to be released for a long time. In the first three quarters of 2020, CompiCip's sales reached 770 million yuan, a year-on-year decrease of 13%. In 2019, Compecip successfully renewed its contract with a payment standard of 4,160 yuan/branch, which was only 25% lower than the price in the previous round of negotiations. At the same time, two additional indications for DME and CNV were added to further expand the number of patients. The neovasal fundus disease market space is large and the competitive pattern is good. It is expected that CompaCip will maintain rapid growth in the future, which is the core driving force for the company's development. Currently, CompaCip is starting a global multi-center phase III clinical trial, and entering overseas markets is expected to further improve the company's profit and valuation level. The proprietary Chinese medicines and chemicals sector is growing steadily and will continue to contribute to stable cash flow in the future. The chemical pharmaceutical sector achieved revenue of 940 million yuan in the first three quarters of 2020, an increase of 5.3% over the previous year; the proprietary Chinese medicine sector achieved revenue of 640 million yuan, which was the same as the previous year. Overall, after the company's marketing reforms were completed, adjustments in the traditional varieties sector ended and began to resume steady growth. It is expected to continue to contribute to stable cash flow in the future. R&D investment continues to increase, and long-term growth momentum is sufficient. R&D expenses reached 160 million yuan in the first three quarters of 2020. Currently, the company's KH906 eye drops to treat new blood vessels induced after trauma, chemical burns, and corneal transplantation are undergoing phase I clinical trials; KH903, a new class 1 biodrug to treat colorectal and other organ tumors, has entered clinical phase II; KH901, a class 1 biodrug for therapeutic cancer vaccines, is also in clinical phase II. In terms of proprietary Chinese medicines, the new drug KH110 (Five Plus Nootropic Granules) to treat Alzheimer's disease has entered Phase II clinical trials. The company's R&D pipeline continues to be rich, and the long-term growth momentum is sufficient. Profit forecasting and investment advice. The company's 2020-2022 EPS is estimated to be 0.93 yuan, 1.14 yuan, and 1.35 yuan, respectively, and the corresponding PE is 45 times, 37 times, and 31 times, respectively. Compecip is expected to continue to be released, chemicals and proprietary Chinese medicines will develop steadily, and performance is expected to maintain a relatively rapid growth rate and maintain a “holding” rating. Risk warning: the risk that the dose of compassic falls short of expectations; the development progress falls short of the expected risk.