The supply of 7-ACA in the first half of '10 was insufficient, and prices continued to operate at a high level. In the future, as some manufacturers expand production and resume production, supply and demand will balance, and the price center will be 800 yuan/kg. Through analysis of supply and demand in the entire market, we believe that the total 7-ACA market gap in 10 years was about 500 tons, and in the first half of the year, due to insufficient commencement of construction due to technical changes, prices have been running at a high level. In the second half of the year, the expansion of production of Health Yuan and Lu Kang and the gradual full production of Fugang will balance market supply; the total market supply will reach 7,600 tons, and actual demand will be about 7,500 tons. The basic balance between supply and demand is that 800 yuan/kg is a reasonable price guarantee; the company achieved implementation of the 7-ACA enzyme method in October 2009 The gross margin level of this product will expand production to 70-80 tons/month in the fourth quarter of '10. After expanding production, the company's production capacity will reach 900 tons in 11 years. We expect the average sales price in the future to be 800 yuan/kg, revenue is expected to reach 540 million yuan, profit will increase by more than 50%, and increase EPS by about 0.04 yuan; the company's pharmaceutical business will benefit from medical insurance expansion, and the growth rate will remain 25% over the next three years. 70% of the company's pharmaceutical business revenue comes from medical insurance catalogue products. The future will benefit from the continuous expansion of the primary medical market. At the same time, the company continuously adjusts the product structure to ensure the overall gross margin level of pharmaceuticals. We expect the company's growth rate in the next three years to be higher than the industry average, reaching more than 25%; in the future, the company's new industrial park project will continue to be implemented and implemented: the company recently announced that it will invest 176 million yuan to build an L-tryptophan production capacity expansion project with an estimated revenue of 290 million yuan; we speculate that the company may also implement 10,000 tons of L-phenylalanine and The performance of the aspartame project and the 100,000-ton PHA project is expected to be released after 2012; valuation and investment advice: We expect the company's EPS from 2010 to 2012 to be 0.31 yuan, 0.41 yuan, and 0.53 yuan, respectively, and net profit growth rates of 383.95%, 30.18%, and 29.10%, respectively; combined with the average valuation of the entire pharmaceutical industry, we think the reasonable valuation range for 11 years is 25-30 times, and the corresponding stock price is 10.25-12.30 yuan, giving the company a “buy” investment rating.