Key investment points: In the field of pea protein purification technology, the company is in a leading position in the world. Currently, it has mastered three extraction technologies, including acid slurry process, dry process, and new dry process, and the purification of pea protein can reach 88%. The company has also accumulated corresponding preparations for pea protein substitutes and upgrades: in addition to pea protein, the company's technology also covers mung bean protein and broad bean protein; in addition, vegetable protein varieties also extend to pea protein peptide, mung bean protein peptide, tissue protein, and brushed protein. According to the report, the company's pea protein business began in 2012. The company's downstream customers include food manufacturers in the fields of premium feed, solid drinks, energy bars, plant-based meat, etc., mostly from the European and American markets. The cooperative relationship between the company and Meiniku was established a long time ago. It only supplied meat through intermediaries. In 2019, the company and Meiniku signed a direct supply contract. In 2019, the company's sales to the top five customers accounted for only 18.58% of total sales. The sales ratio was not concentrated, and plant-based meat was only one of the company's downstream industries. However, “plant-based protein meat” is on the rise, and plant-based meat may become the biggest application area for pea protein in the future. In addition, more R&D and manufacturers will enter this field around the world. Regardless of whether the product is successful or not, it will provide broad development space for suppliers of elements such as the company. Referring to the ratio of plant-based milk to animal milk consumption (13%), if plant-based meat also accounts for 13% of animal meat consumption, then the potential market size for plant-based meat could reach 35 billion US dollars — and this is only the US market. The global meat market is 1.4 trillion US dollars. At a rate of 13%, the potential global market for plant-based meat could reach 182 billion US dollars. Plant-based meat will become one of the largest downstream applications of pea protein, and the rapid growth of the plant-based meat market has opened up room for pea protein growth. The company's pea protein production capacity (including new production capacity) is expected to be fully released after 2020, revenue is expected to reach 1.5 to 1.6 billion yuan, and the gross margin of pea protein will also rise steadily. We expect the company's earnings per share in 2020, 2021, and 2022 to be 0.26 yuan, 0.40 yuan, and 0.56 yuan. Referring to the closing price of 17.16 yuan on July 3, the corresponding price-earnings ratios are 66 times, 42.9 times, and 30.64 times, respectively. We covered the company for the first time and gave the company a “buy” rating. Risk warning: Pea production is declining and prices are rising; global competitors are expanding production capacity; pea protein substitutes are being developed and mass-produced.