Event: The company announced its 2020 semi-annual report: revenue of 816 million yuan, YoY +37.82% during the reporting period; net profit of 219 million, YoY +92.00%; net profit of 219 million dollars, YoY +92.00%; net profit after deducting non-return mother of 208 million, YoY +95.77%; performance exceeded market expectations. The pandemic is driving demand for antibiotics, and the performance of core products has increased significantly. With the outbreak of COVID-19 in the first half of the year, demand for high-end antibiotics such as compound antibiotics and penemens increased due to the fact that critically ill patients were more likely to experience problems such as cross-infection, leading to a significant increase in orders for the company's core products. By product, API revenue was 318 million yuan, YoY +34.36%, gross profit margin was 51.78%, an increase of 8.33 pct over the previous year; intermediate revenue was 494 million yuan, YoY +40.76%, and gross profit margin was 39.10%, an increase of 2.29 pct over the previous year. Considering that the overseas epidemic continues to worsen, we believe that demand for the company's tazobactam series, sulbactam series and Peinam series products will remain strong. Prices are expected to remain high, and the performance is guaranteed throughout the year. Product reserves are abundant, and the pharmaceutical field is expanded downstream. It is expected that in the second half of this year, Jiangxi Xiangtai's sterile freeze-dried API project, as well as Weifang Aotong's Navirus-based intermediates and other intermediates projects, will all enter the production and trial production stages, and the company's product line will be further enriched. Furthermore, in the downstream pharmaceutical sector, Fuxiang (Dalian) obtained the “Drug Registration Approval” for agatroban injection approved and issued by the State Drug Administration in the first half of the year. Agatroban is an anticoagulant drug in the cardiovascular field. It has the advantages of rapid efficacy, short action time, low bleeding tendency, and no immunogenicity, and has been included in the 2019 edition of the National Health Insurance Catalogue. The extension of the industrial chain is expected to increase the company's profit margin. The new project is progressing steadily to help the company develop in the future. In the first half of 2020, the company established a wholly-owned subsidiary, Jingdezhen Fuxiang Life Technology Co., Ltd., to prepare for the Fuxiang Biomedical Project. Currently, the land auction for the project has been completed and is progressing steadily according to the plan. It is expected that a production base for 2,500 tons of chiral drugs, 1,200 tons of biopharmaceuticals, and 500 million tablets (packs/sticks) of pharmaceutical preparations involving products including 4-AA, meropenem and antiviral products will be built. In the long run, the anti-infective market has broad prospects for advanced antibiotics such as penemens and compound antibiotics. The company's layout and active promotion of new projects in this field will be a strong driver for future growth. Profit forecast: The net profit of the mother in 2020-2022 is expected to be 4.05/4.86/534 million yuan respectively, corresponding to the current stock price PE of 24/20/19 X, respectively, maintaining the “buying rating”. Risk warning: product price reduction; raw material price increase; risk of discontinuation of production due to environmental issues, etc.