Incident: The company announced its 2017 financial statements, achieving operating income of 1,009 million yuan and net profit to mother of 104 million yuan, an increase of 27.10% and -21.08% over the previous year. In 2017, net profit after deducting non-recurring profit and loss was 98 million yuan due to a sharp reduction in current government subsidies, a year-on-year decrease of 6.21%. The year-on-year decline in performance was mainly due to a sharp rise in the market price of the raw material hydrofluoric acid compared to last year, resulting in a higher cost increase than the increase in revenue. The company also announced the 2017 profit distribution plan. It plans to pay a dividend of 4.00 yuan (tax included) for every 10 shares, while increasing 10 shares for every 10 shares. The aluminum grain refiner market is growing, gradually shifting to high quality. The downstream aluminum processing industry has been structurally adjusted in recent years. The share of ordinary construction aluminum profiles has gradually declined, and the growth rate of aluminum demand in emerging markets represented by high-end aluminum strips and large-scale industrial aluminum profiles has increased. As an important additive in aluminum production, the demand for aluminum grain refiners continues to grow rapidly, and the performance requirements for refiners are higher. In this industry context, the company, as an industry leader, seizes trends, expands production scale, and increases the production volume of high-end products. Prices of raw materials are shifting downstream, expanding new bases to reduce production costs. Last year, the company's products were affected by fluctuations in the prices of raw materials hydrofluoric acid and fluoride, and net profit per ton was greatly affected. As the price fluctuation in the hydrofluoric acid market stabilizes, the company has increased product processing fees and passed on raw material procurement costs to downstream customers. In addition, the company has built new production bases in Jiangxi and Henan, which can reduce energy and labor costs while expanding the scale of operations and improving process standards. It is expected that the unit cost of the company's main products will continue to decline in the future. Improve the industrial chain, enrich the product line, and ensure long-term development. On the basis of the upcoming completion of the fund-raising project, the company has also planned production bases in Luoyang, Henan and Longnan, Jiangxi. It is expected to achieve 90,000 tons of aluminum grain refining agents, 30,000 tons of aluminum-based intermediate alloys, 30,000 tons of 70 high titanium iron alloy cored wire, 80,000 tons of high-purity silicone-free hydrofluoric acid, 150,000 tons of new iron-based materials, etc., to ensure the company's long-term rapid development over the next 3-5 years. As a leading global aluminum grain refiner company, the company continues to expand its production capacity drastically, actively expand up and down the industrial chain, add many new products using its technical advantages, and at the same time improve the overall economic efficiency of the industrial chain. It will maintain rapid growth over the next 3-5 years. We expect the company's net profit to be 244/3.94/492 million yuan respectively in 18-20, up 133.5%/61.4%/24.9% year-on-year, corresponding to EPS 3.05/4.92/6.15 yuan. The current stock price corresponds to PE 27.9/17.3/13.9 times, maintaining a “buy” rating. Risk warning: The progress of absorption of new production capacity is lower than expected; the progress of construction and commissioning of new projects is lower than expected.