1. The sharp year-on-year increase in performance in the first three quarters was in line with expectations. In the first three quarters of 2010, the company expects net profit of about 342973-383323 million yuan, an increase of 70%-90% over the previous year, and EPS of about 0.1319-0.1474 yuan. Net profit for the third quarter is expected to be about 1262.18-16.656,800 yuan, up 6%-40% year on year, and EPS is about 0.0485-0.0641 yuan. The company actively adjusted its product structure and marketing strategy and expanded product sales, resulting in a year-on-year increase in net profit due to a year-on-year increase in the company's operating income. 2. Leading local pharmaceutical enterprises benefit from the release of primary medical demand. The company is a leading pharmaceutical industry and commercial enterprise in Anhui Province. It has formed a general medicine product line represented by large infusions. Benefiting from the release of primary medical demand, the sales scale was further expanded in the first half of the year. Among them: chemical agent revenue was 226 million, up 3.18% year on year, gross margin increased 10.42 percentage points, biological products revenue was 26.04 million, up 13.59% year on year, gross margin increased 9.8 percentage points; revenue from traditional Chinese medicine was 47.94 million, up 8.43% year on year, and gross margin increased by 0.5 percentage points. 3. Be optimistic about the development prospects of anti-cancer implants. In July of this year, the company signed a “Joint Venture Contract” with Anhui Zhongren Technology to enter the field of anti-cancer implants. Zhongren Technology uses patented technology, clinical approvals, and all production technology related to cisplatin and methotrexate anti-cancer implants as funding. It is expected that “sustained-release cisplatin for implants” will be marketed and sold in the second half of 2012, and “sustained-release methotrexate for implants” will be marketed and sold in the second half of 2013. The new product can not only reduce the systemic toxic response of anti-cancer drugs, but also selectively increase drug concentrations in the tumor area and enhance the therapeutic effects of anti-cancer drugs, which is expected to become a new profit growth point. 4. Investment advice: recommendation (maintenance). We maintain our profit forecast for the company's 2010-2012 EPS of 0.2, 0.3, and 0.38 yuan. The corresponding PE is 45X, 29X, and 23X, respectively. We believe that the company, as a leader in general medicine in the region, has clearly benefited from medical reform and has long-term restructuring expectations; anti-cancer implants, as a more ideal route of administration, are expected to become a new profit growth point; we are optimistic about the company's future development prospects and long-term investment value, and maintain the “recommended” rating.