Incident: Yongtai Technology released its 2017 three-quarter report: In the first three quarters, it achieved operating income of 1,891 million yuan, YoY +45%, net profit to mother of 280 million yuan, YoY +128%, EPS 0.34 yuan, net profit after deducting 100 million yuan, YoY -10%, and operating cash flow of 153 million yuan. Among them, the third quarter achieved operating income of 657 million yuan, YoY +74%, QoQ -7%, net profit to mother of 59 million yuan, YoY +399%, QoQ +5%, EPS 0.07 yuan, net profit of 7.92 million yuan after deduction, and YoY -5%. The company obtained investment income of 205 million yuan in the first three quarters, mainly due to the sale of Fuxiang shares. The company expects a net profit range of 416 to 499 million yuan for the full year of 2017, YoY +50 to 80%. Opinion: The vertically integrated industrial chain of the pharmaceutical sector is beginning to take shape. At the end of 2016, the company completed the asset transfer of 100% of Zhejiang Shixin's shares and 90% of Foshan Shixin's shares, and quickly realized a vertically integrated pharmaceutical business industry chain from pharmaceutical intermediates and APIs to formulations. The performance promise of this merger and acquisition is that the cumulative net profit of Zhejiang Shixin (100% equity) and Foshan Shixin (90% equity) will not be less than 225 million yuan from 2016 to 2018, with a compound growth rate of about 10-15%. Trial production of the first phase of the lithium hexafluorophosphate project created a new profit growth point. The first phase of the 3,000-ton lithium hexafluorophosphate project of the company's “6000 tons of lithium hexafluorophosphate and 2000 tons of lithium bisfluorosulfonimide project” began trial production work at the end of September. It is expected that later, the company will be able to apply for factory inspection and submit mass production samples from interested customers to implement the order. The project site is located at the “12th Five-Year Plan” fluorine chemical industry development base in Fujian Province. It has good infrastructure and perfect industrial facilities. The project partner Yongjinghua works as a large-scale fluorine chemical manufacturer in Fujian Province, and also has rich experience in fluorine chemicals and sufficient raw material guarantee capabilities. CF photoresist begins the import substitution process. The company's 1,500-ton CF photoresist project is in the equipment procurement and installation stage. The company will continue to promote product testing with Huaxing Optoelectronics to achieve an order breakthrough. The pesticide sector extends downstream. Shanghai Nonghui has promoted the rapid growth of the company's pesticide trade with its leading overseas pesticide registration certificate advantages and channel network advantages in more than 60 countries around the world. Conclusion: Taking into account the remaining stock sales in Jiangxi Fuxiang and the combined factors of Zhejiang Shixin and Foshan Shixin, we expect net profit from 2017 to 2019 to be 418 million yuan, 586 million yuan, and 349 million yuan respectively, with EPS of 0.51 yuan, 0.71 yuan, and 0.42 yuan respectively. Currently, the corresponding P/E of the stock price is 28 times, 20 times, and 34 times, respectively. Maintain a “Recommended” rating. Risk warning: The progress of new business development, integration of acquired enterprises, and new production capacity fell short of expectations.