[Investment Highlights] Performance picked up in the third quarter. Recently, the company released a three-quarter report. The first three quarters of 2020 achieved revenue of 2.35 billion yuan, down 2.6% year on year, and the decline narrowed further; net profit to mother was 580 million yuan, up 4.9% year on year; net profit after deducting non-net profit was 520 million yuan, up 3.6% year on year. The company's third-quarter results picked up, achieving revenue of 950 million yuan, +7.2% YoY, +25.5%; net profit attributable to mother for the single quarter was 240 million yuan, +15.3% YoY, +54.8% month-on-month; and net profit deducted from non-mother for the single quarter was 230 million yuan, +21.7% YoY. Proprietary Chinese medicines and chemicals are growing steadily. By sector, revenue from proprietary Chinese medicines in the first three quarters was 640 million yuan, +0.08% year on year, of which revenue for the third quarter was about 260 million yuan, +8.75% year on year; revenue for chemical drugs was 940 million yuan, +5.25% year on year. Of these, revenue for the third quarter was about 350 million yuan, +5.76% year on year. Proprietary Chinese medicines and chemicals grew steadily. R&D is progressing steadily. On September 25, the global phase III clinical trial of CompiCip for the treatment of wAMD completed the 36th week of major endpoint visits for all subjects (interim data is expected to be released in Q1 2020). Furthermore, the company announced on October 26 that the phase III clinical trials of CompiCip's US DME, BRVO, and CRVO have passed the FDA's Special Protocol Assessment (SpecialProtocol Assessment), and the overseas marketing plan for CompiCip is progressing steadily. Other related product development is being carried out in an orderly manner. The net interest rate has increased, and the cost control effect is obvious. During the reporting period, the company's gross margin was 90.2%, down 2 pcts year on year; net interest rate was 24.7%, up 1.7 pct year on year; in terms of expenses, the company's sales/management/finance/R&D expenses in the first three quarters were 47.5%/9.8%/-0.8%/6.7%, respectively, with year-on-year changes of -2pct/-0.6pct/+0.1pct/-1.1 pct; taken together, the cost control effect was 63.2% (66.9% in the same period last year), and the cost control effect was obvious. Cash flow continues to rise. The company's net operating cash flow in the first three quarters was 620 million yuan, up 15.9% year on year; in 20Q3, net operating cash flow was 400 million yuan, up 32.4% year on year. In terms of monetary capital, the company's monetary fund balance at the end of the period was 1.63 billion yuan, down 19.1% year on year; in terms of accounts receivable, the company's accounts receivable balance at the end of the period was 300 million yuan, down 27.5% year on year. Accounts receivable accounted for 7.4% of current assets; the company's distribution payments picked up. In terms of capital structure, the company's balance ratio at the end of the reporting period was 32%, and the capital structure is relatively stable. [Investment Proposal] The company's blockbuster product, Compecip, is a scarce innovative drug with global competitiveness. Multiple indications have been approved and included in medical insurance in sequence, and overseas markets are gradually expanding, which can bring a steady increase in the company's performance in the medium to long term. As the COVID-19 pandemic is gradually brought under control, Compassip is expected to usher in volume. In addition, as the company's other R&D pipeline products continue to advance, the company's performance is expected to resume high growth. We expect the company's revenue in 2020-2022 to be 34.36/41.17/4.902 billion yuan, respectively, net profit to mother of 8.23/9.71/1,156 billion yuan, corresponding EPS of 0.94/1.11/1.32 yuan, and corresponding PE of 45/38/32 times, respectively, giving it an “increase in holdings” rating. [Risk Warning] Product release falls short of expected risk; R&D progress falls short of expected risk; competition increases risk;