Valuation and investment advice The company achieved earnings per share of 0.037 yuan in 13 years and is expected to be 0.058 yuan in 14 years. Based on the closing price of May 14, the static and dynamic price-earnings ratios are 134.59 and 85.86 times, respectively. The median price-earnings ratio of the flavoring and fermented products industry in '13 and '14 was 40.71 times and 29.988 times, respectively, while the median price-earnings ratio of listed API companies in '13 and '14 was 54.24 times and 30.22 times, respectively. The company's current valuation level is higher than the average of listed companies in the same industry. Affected by industry overcapacity and irrational price competition, the market prices of the company's leading products continued to drop sharply. Looking at the moment, apart from the good performance of the biochemical business, the feed additives and food additives business lost money. As the company introduces strategic investors and rationalizes internal governance; at the same time, by improving the company's product structure, optimizing and adjusting the industrial layout, increasing the added value of products, and reducing costs and efficiency through process improvements, it is more likely that the company's future performance will exceed expectations. We gave the company a reasonable valuation range of 4.06-5.22 yuan, which is equivalent to 70-90 times PE in 14 years. Taking into account absolute and relative valuations, we gave the company a “within the next six months, neutral” rating. Biochemicals: New product promotion is expected to bring profit growth points. In 2013, the company's biochemical sales revenue was 343 million yuan, an increase of 3.93% over the previous year. The year-on-year increase in biochemical sales was mainly due to an increase in sales revenue of adenosine and adenine. Judging from the level of gross margin, although the gross margin of biochemicals has declined significantly in recent years, it has remained around 25%. In order to break out of the quagmire of price competition that dominates products, the company actively develops new products with a view to increasing new profit growth points. New products include adefovir ester tablets, lamivudine, famciclovir, and dibenzophenone. We believe that the company's biochemical products are still expected to maintain a growth rate of more than 20%. With the promotion of new products, gross margin is expected to gradually increase in the future. Food additives: Facing intense internal and external competition, the company's food additive sales revenue in 2013 was 428 million yuan, an increase of 1.07% over the previous year. The main reason for the year-on-year increase in sales revenue was increased sales of inosine acid (IMP) and flavourful nucleotides (I+G). Due to intense competition in the industry, product prices have been falling. Currently, the price of I+G is about 140-150 yuan/kg. We expect the food additives business to only maintain growth between 0-5% in the future. Feed additives: In response to production cuts, the company's feed additive sales revenue in 2013 was 50 million yuan, a year-on-year decrease of 72.64%. Data monitoring for the 1st quarter of 2014 shows that with the exception of ruminant feed, which is basically flat year on year, all other types of feed have declined, and the overall situation is not optimistic. Due to the sluggish performance of the downstream aquaculture industry, we expect that feed additive sales will continue to cut production to avoid losses. Main risks The risk of increased competition in the market; the risk of rising raw materials