Event: The company released its report for the third quarter of 2020. The first three quarters of 2020 achieved revenue of 1.109 billion yuan, an increase of 14.68% over the previous year; realized net profit of 294 million yuan, an increase of 35.89% over the previous year; and realized net profit of 264 million yuan, an increase of 26.39% over the previous year. Net cash flow from operating activities was $287 million, up 61.75% year on year. Q3 achieved revenue of 293 million yuan in a single quarter, a year-on-year decline of 21.90%, and net profit of 74 million yuan, a year-on-year decrease of 27.03%. Opinion: Q3 declined year-on-year due to factors such as discontinuation of production and maintenance, but under the same caliber, performance increased 21% compared to last year's Q2. The revenue side of the company's Q3 single quarter fell 21.90% year on year, and the performance side fell 27.03% year on year, mainly because the company scheduled maintenance time for the third quarter this year and the second quarter last year, so from the same perspective, performance increased 21% compared to last year's Q2. Projects under construction are speeding up, and production capacity is expected to be released one after another. The company's projects under construction continued to accelerate this year. As of the end of the reporting period, the balance of projects under construction reached 518 million yuan, an increase of 50.33% over the beginning of the year. With the acceleration of projects under construction, the company's production capacity is expected to be released at an accelerated pace in the future. Judging from the specific projects, the high-quality tazobactam construction project has begun production, and navir intermediates, which are mainly used to produce antiviral products such as atazanavir, have also entered the production capacity investment stage. Product lines and related industrial chains continue to expand, and profits are expected to continue to be realized. Investment advice: The company has been deeply involved in R&D, production and sales of high-end antibiotic APIs and intermediates for nearly 20 years. It has good quality control and registration advantages. It has customers from well-known domestic and foreign manufacturers, and is a major global supplier of beta-lacamidase inhibitors, carbapenems and lovirine drugs. Currently, in the context of the continuous promotion of domestic injectable consistency evaluation and volume procurement, and the continuous transfer of international API production capacity to China, the company's demand for high-quality APIs is rapidly increasing, and the future market space is broad. The estimated operating income for 2020-2022 is 1,625, 19.60, and 2,354 billion yuan respectively, and net profit attributable to shareholders of listed companies is 400, 5.15, and 646 million yuan respectively, and EPS is 0.85, 1.09, and 1.37 yuan/share, corresponding to PE of 18, 14, and 11 times, respectively, maintaining the “increased holdings” rating. Risk warning: 1. International trade disputes and exchange rate risks. 2. The release of production capacity fell short of expectations. 3. Prices of raw materials fluctuate greatly. 4. The risk of environmental supervision and punishment.