Event: The company announced the 2020 interim report performance forecast. It is expected to achieve net profit of 600-750 million yuan, an increase of 155.74-219.68% over the previous year. Glove profits have achieved high growth under the COVID-19 pandemic, and the cardiovascular business is under pressure in the short term. According to the performance forecast, the median net profit of 2020H1 was 675 million yuan, and the median growth rate was 188%. Among them, the median net profit achieved in the 2020 Q2 quarter was 530 million yuan, and the median growth rate was 283%, a significant increase from Q1. The main reason is that the demand for protective products such as gloves at home and abroad has increased dramatically and the price of gloves has increased rapidly under the COVID-19 pandemic. In the cardiovascular business, considering that the domestic epidemic has gradually improved, it is expected to recover in the second half of the year. Overseas, as the epidemic continues to ferment, the second quarter is still under pressure. With new production capacity put into operation and price increases, glove profit in the second half of 2020 is expected to be significantly higher than in the first half of 2020. According to the forecast, due to honest cooperation and long-term strategic considerations, the company complied with the order price determined by the customer during the gradual spread of the epidemic and gave the customer a buffer period for the price increase. Therefore, the order price that the company achieved revenue in the first half of the year was not fully in line with the real-time market price; since late May, the order price for the company's revenue has begun to be fully close to the market price. Furthermore, in the second half of 2020, the company expects an annual production capacity of 1.5 billion PVC+2 billion nitrile+2 billion TPE gloves to be put into production one after another. The net profit of medical and protective equipment in the second half of 2020 is expected to be significantly higher than in the first half of 2020 due to the sharp rise in volume and price. Baisheng's coronary business has begun to reap benefits, and at the same time, the deployment of cutting-edge products such as heart valves has brought long-term sustainable competitiveness. BioFreeDom, a major variety in the company's coronary business, is expected to be registered by the FDA and NMPA respectively around the end of 2020. The BA9-carrying drug balloon, the cobalt-chromium alloy version of BioFreeDom, is expected to be approved one after another in the next 1-2 years, and performance is expected to pick up at an accelerated pace after the pandemic. Furthermore, the NVT generation TAVR (60-70% recyclable) can be deployed strongly in the field of structural heart disease through epitaxial and self-research. The NVT generation TAVR (60-70% recyclable) can be further rapidly released directly through Baisheng's European channel. The second-generation 100% recyclable TAVR will soon begin clinical trials in Europe and China at the same time. At the same time, the company has begun research and development work on mitral and tricuspid valve repair/replacement products, with strong long-term competitiveness. Profit forecast and valuation: We expect the company's revenue in 2020-2022 to be 77.43, 77.52, and 8.245 billion yuan, up 122.78%, 0.11%, and 6.36% year on year, and net profit of 28.64, 20.03, and 1,656 billion yuan, up 484.23%, -30.07%, and -17.34% year on year, corresponding to EPS of 2.97, 2.08, and 1.72. Currently, the company has a market value of 365 billion yuan. Considering that the volume and price of the company's glove business have risen sharply under the pandemic, performance is expected to continue to exceed expectations. Innovative cardiovascular equipment products are about to enter the harvest stage. Using the segmented valuation method, we have a reasonable market value of about 50-60 billion yuan in 2020, maintaining a “buy” rating. Risk warning: risk of product marketing not meeting expectations, risk of policy changes, risk of product development failure, impact of fluctuations in glove prices, and risk of production capacity investment progress falling short of expectations.