A leading antimicrobial/antiviral drug company with a continuously rich product line. For the first time, Fuxiang Pharmaceutical was given a “buy” rating. Fuxiang Pharmaceutical is a leading enterprise with specialty antibacterial raw materials/intermediates and antiviral raw materials/intermediates. The company's sulbactan and tazobactam series products are growing steadily, and strong demand for penem-based antibiotics is driving the continuous release of intermediates such as 4-AA. The active layout of sterile raw materials, antiviral drugs/intermediates, and novel enzyme inhibitors will also become new performance growth points. We expect the company to achieve net profit of 392 million yuan/485 million yuan/579 million yuan respectively in 2020/2021/2022, with year-on-year growth rates of 28.0%/23.8%/19.4%, EPS of 0.84 yuan/1.04 yuan/1.25 yuan respectively, and current stock price corresponding to PE of 26.8/21.6/18.1, respectively, giving a “buy” rating for the first time. Beta-lactamase inhibitors have broad prospects, and demand for penem-based antibiotics is strong. The company is carrying out a full industry chain layout. The company is the only supplier with standardized market certification in the domestic sulbactan field. The market position is stable, and the supply of high-quality sulbactan is still in a tight balance. It is expected that prices will drop drastically in the future, and sales will continue to grow steadily. The company is one of the oligopolies in the field of tazobactam. It is expected that the product price system will be stable in the future, and sales will continue to grow steadily. Penan antibiotics are still growing rapidly, and will continue to drive the release of intermediates such as 4-AA in the future. The company plans to build a 600-ton 4-AA and 200-ton meropenem project to further enhance its voice in the industry and extend it to downstream APIs to achieve a full industry chain layout in the carbapenem field. With the layout of sterile APIs and antiviral drugs, several products are gradually being released with lovir intermediates from Aotong Pharmaceutical, a subsidiary of Aotong Pharmaceutical. In the future, navir intermediates will also be added and gradually extended to downstream APIs. New projects such as piperacillin sodium/tazobactam sodium (8:1) sterile powder will also gradually contribute to the performance. The products being developed by the company include novel enzyme inhibitors and antiviral drugs. Among them, the novel enzyme inhibitor AAI101 and cefepime combined with cefepime have good clinical phase III data. It is likely that it will be approved for marketing in the future. The company is expected to become its main supplier, and the CDMO business will become a new performance growth point. Risk warning: Strict resistance restriction policies, antibiotic sales are lower than expected; gross margin has declined; product competition has deteriorated; new production capacity and products fall short of expectations, etc.