Event: The company released its 2018 three-quarter report. The first three quarters achieved revenue of 1,356 billion yuan, up 24.8% year on year; realized net profit of 151 million yuan, up 74.7% year on year; of these, revenue for the third quarter was 461 million yuan, up 32.3% year on year, and net profit to mother was 63.25 million yuan, up 124.2% year on year. Key investment points: Increased profitability of organic pigments drives continuous growth in the company's performance due to environmental inspections, and the shortage of organic pigments and upstream intermediates has led to a general rise in the price of intermediates and finished pigments. Since the company has its own intermediate production capacity of more than 10,000 tons, the cost side is effectively controlled, and the profitability of single-ton products has been greatly improved, which continues to drive the company's performance growth. The company achieved revenue of 999 million yuan in the first three quarters, an increase of 18.1% year on year; achieved an average sales price of 52,000 yuan/ton, up 17.2% year on year; in terms of sales, the company achieved cumulative sales price of 52,000 yuan/ton, up 17.2% year on year; in terms of sales volume, the company achieved cumulative sales price of 52,000 yuan/ton, up 17.2% year on year; in terms of sales volume, the company achieved cumulative sales price of 52,000 yuan/ton, up 17.2% year on year; in terms of sales volume, the company achieved cumulative sales price of 52,000 yuan/ton, up 17.2% year on year; in terms of sales volume, the company achieved cumulative sales price of 52,000 Sales of 191,800 tons of various organic pigments, a slight increase compared with the same period last year. The main reason the growth rate was slightly lower than in the first half of the year. The company's sales volume in the third quarter was affected. In the context of stricter environmental protection, downstream users will also tend to choose standardized suppliers in the future to ensure the stability of raw material supply, so future customers will focus on high-quality leading companies like the company. The competitive pattern of the industry has been restored, and the intrinsic value of organic pigments has gradually returned. Compared with traditional dyes, organic pigments are very similar to dyes in terms of chemical structure and use, but in recent years, the gross margin level of the organic pigment industry (about 25%) is significantly lower than dyes (about 35%) and is at an underestimated level. The main reason is that the dye industry's higher industry concentration level (CR3 = 70%) has formed a healthy and orderly industry business environment, and the upstream and downstream bargaining power of dye products is also stronger. As environmental protection clears up backward production capacity, the organic pigment industry will also be effectively repaired in the future, intrinsic value will be restored, and there is a lot of room for improvement in its gross margin level. Profit forecasting and ratings. Considering the continued increase in organic pigment profits, the company's EPS expectations were raised. The company's EPS is expected to be 0.83 yuan, 1.06 yuan, and 1.31 yuan respectively from 2018 to 2020, corresponding to the recent closing price PE of 15, 12, and 10 times, respectively, maintaining the “recommended” rating. Risk warning. Raw material prices and exchange rates fluctuate greatly; the withdrawal of backward production capacity falls short of expectations