Incident: The company announced that it intends to use its own funds to repurchase the company's shares from the secondary market for an equity incentive plan or employee stock ownership plan using centralized bidding transactions. The total repurchase capital is not less than 10 million yuan (inclusive) or 20 million yuan (inclusive), and the repurchase price is not more than 20 yuan/share. Continuous launch incentives highlight the company's confidence and are optimistic about the company's new materials+military business layout: The company has now formed a “new materials+military” two-wheel drive business model. Among them, adhesives and new materials are widely used in wind power blade manufacturing, soft material composite packaging, rail transit, naval marine engineering, automobiles, electronics, construction, mechanical equipment and industrial maintenance. On the basis of the polyimide foam insulation materials, military electromagnetic compatibility and power module business now formed in the military sector, the company plans to gradually acquire 100% of Beijing Jinghanyu's shares into the military electronic component testing field. The first acquisition is estimated at 823 million yuan, corresponding to the estimated 2019 performance of about 10 times PE. The net profit growth rate for the next four years is not less than 15%, which is significantly lower than the valuation level of comparable companies that have already been listed. The company's first transaction to acquire 8.5055% of Jinghanyu's shares was recently reviewed and approved by the board of directors. The first phase of the company's employee shareholding transaction was completed in January 2020, with a total amount of 26.03 million yuan. This time, the company introduced a repurchase plan and plans to further implement equity incentives or employee stock ownership plans, fully demonstrating the company's confidence in future development. Low raw material prices benefit the company's adhesive business profit improvement: the main raw materials for adhesives include bulk chemicals such as epoxy resin, MDI, TDI, acrylic acid and esters. Raw materials account for more than 70% of production costs. The recent sharp drop in oil prices has led to a decline in upstream raw material prices, and the company's adhesive business profit is expected to improve. Profit forecast and investment suggestions: Considering the acquisition of Jing Hanyu, we expect the company's net profit to be 1.39, 1.60, and 245 million yuan from 2019 to 2021 (calculated based on Jinghan Yu's 2020 performance promise of 92 million yuan, 2021 performance promise of 106 million yuan, and 75%), corresponding EPS of 0.55, 0.63, and 0.97 yuan/share, respectively, and corresponding three-year PE of 24.8, 21.6, and 14.1 times, maintaining the “buy” rating. Risk warning: the risk of macroeconomic growth falling short of expectations, the risk of a sharp rise in raw material prices, the risk of increased market competition, and the risk of merger consolidation and impairment of goodwill.