There was a significant decline in performance in 2005, mainly due to a sharp decline in investment returns. There are two main reasons for the decline in performance: main business and investment income, especially investment income. First, by adjusting the product structure, products with low gross margin, little development space, and poor industry relevance were eliminated. Among them, revenue from laundry detergent and laundry detergent products with negative gross margins fell by 68.94%, and soap revenue with a gross margin of about 10% fell by 48.39%, which caused the company's main business revenue to drop by 5.62%; second, competition in the toothpaste market became increasingly intense, and prices of raw materials for most products rose, resulting in a decline in comprehensive gross margin of 2.86%, and total profit margin of the main business fell by 17.80%; finally, the company's investment income declined sharply, declining by a margin of magnitude That's 85.47%. Therefore, the main reason for the decline in the company's performance in 2005 was a sharp decline in investment income, which also indicates that the company should strengthen the profitability of its main business. The structure continued to be adjusted in the first quarter of 2006, and investment returns increased significantly. The company's main business revenue declined sharply in the first quarter, by 53.62%. The main business revenue declined, mainly because the company continued to sell products with reduced gross margin and eliminated the steel business. It was a continuation of the company's product restructuring in 2005. In the context of the main business adjustments, the company's comprehensive gross margin rose to 29.68% from 17.48% in the first quarter of 2005. Investment income has increased 40 times. Although there is little correlation between the company's investment income source business and main business, since the company's investment income mainly comes from CITIC Securities, the company's investment income is expected to increase significantly against the backdrop of a stronger stock market. Adjust the company's future performance forecasts. Eliminate the steel revenue included in the original forecast of the main business revenue, and reduce the main business revenue. At the same time, investment income was significantly increased by 144.13%, thereby increasing the level of net profit predicted for 2006. Give an investment rating of “Recommended”. After the implementation of the company's stock reform plan, the natural exclusion price was 5.53 yuan, 19.80% lower than the net assets per share. If we only consider the value-added portion of G CITIC corporate shares, the net assets per share will increase by another 3.15 yuan, then the natural net assets per share will be 44.95% lower than the net assets after the increase. Therefore, the current stock price is still seriously discounted compared to net assets and is in a relatively safe zone. However, since we recommended this stock, the increase has been more than 20%; at the same time, the competitive pressure faced by the company's toothpaste business is still high, the development of modern channels and the improvement of sales team execution still faces certain difficulties. Short-term profitability still cannot be greatly improved, and the market will still discount the company's stock price by a certain margin compared to net assets. Therefore, we downgraded our rating to “recommended.”