Investment points: Corticosteroid APIs, the company's main source of profit, are expected to grow by about 15-20% in the next two years. The company is currently the largest manufacturer of corticosteroid APIs in China. It currently has a production capacity of about 200 tons, 147 tons in 2011, accounting for about 30% of the world and 60% of the domestic market. We expect the API business to grow 15%-20% over the next two years for the following reasons: 1. Downstream corticosteroids can maintain 5-8% natural growth; 2. When industrial transfer in the regulated market is ongoing, the original large companies such as Pfizer, Sanofi, and SmithKline are gradually abandoning the production of APIs with low gross profit due to factors such as environmental protection, raw materials, and rising labor prices; 3. The increase in saponin prices in the non-regulated market is conducive to increasing industrial concentration and eliminating small enterprises. 4. Development of new dosage forms of corticosteroids and new applications. At the same time, we compared the logic of price increases for corticosteroids, heparin, and VE, and believe that under the current pattern, Tianyao, the industry leader, has a certain ability to increase prices, and may benefit from a small increase in terminal prices within 2 years. The pharmaceutical business accounts for a small share, and is expected to accelerate development as the company's operations improve. Formulations mainly include four types of dexamethasone acetate tablets, methylprednisolone tablets, prednisone acetate tablets, and triamcinolone tablets. Domestic sales have just begun. Among them, the domestic market for newly developed methylprednisolone tablets is growing rapidly, and generic drug application documents have also been submitted to the US FDA. The acquisition of Cheonan Pharmaceutical's pharmaceutical amino acid API business was increased, and operating costs were reduced by integrating environmental protection and other collaborations. It is expected to contribute about 8 to 10 million in profit over 13 years. The company's high-base corticosteroid API business is expected to benefit from steady industry growth and a slight improvement in gross margin within the next 2 years. The small-base pharmaceutical business is expected to enter the fast track, and the additional acquisition of Cheonan Pharmaceutical will increase its performance. The Group's positioning of Tianyao shares will accelerate the company's development from a management level. We expect the EPS for 12 and 13 to be 0.18 yuan, 0.27, and 0.36 yuan; the EPS after considering the dilution of the additional share capital will be 0.15 yuan and 0.24 yuan. Although the current valuation is not cheap, considering that the company is at an inflection point in its operations, a recommended rating is given. Risk warning: changes in competition strategies of foreign giants, RMB appreciation, competitor acquisition of sterol production routes, etc.