Performance review: Danhua Technology announced its 12-year annual report. The company achieved annual revenue of 1.102 billion yuan, an increase of 98% over 2011; net profit attributable to shareholders of the parent company was 28 million yuan, and earnings per share were 0.04 yuan, turning a loss into a profit, but falling short of our and market expectations. Losses in the fourth quarter were mainly affected by one-off projects. The company lost 95 million yuan in the fourth quarter, mainly because it returned 200 million yuan of misappropriated funds from the former actual controller received at the beginning of last year during the quarter to confirm income tax expenses of about 50 million yuan. The profitability of the Tongliao Ethylene Glycol Project is gradually showing. The company produced 101,100 tons of ethylene glycol and 49,600 tons of oxalic acid throughout the year, with an average load of 63%; of these, the load at the end of the year was over 85%. The average gross margin of ethylene glycol and oxalic acid reached 15%, of which it reached 20% in the second half of the year, so it already has real profitability. The company plans to coordinate with the Development and Reform Commission to complete the completion and acceptance of the project as soon as possible. Furthermore, Tongliao Gold Coal plans to expand the capacity of existing production facilities this year and increase the production capacity of ethylene glycol by about 100,000 tons, thereby greatly increasing the conversion rate of coal and reducing costs. The Henan base will be a highlight in 2013. Among the company's five major projects in Henan, the Xinxiang and Puyang projects have already entered the trial production stage. The load has reached 50%, and the light transmittance has steadily increased; the Anyang project has also completed the entire process. We believe that with the steady progress of subsequent projects in Henan, the benefits of ethylene glycol products will gradually become apparent, contributing considerable investment returns to the company. The acetic anhydride project is expected to divest. The company's acetic anhydride project has now basically ceased production and has been included in the scope of the relocation of the Danyang municipal government. Industrial adjustments will be carried out in the future. We expect the company's final divestment of the project in 2013. In 2012, the acetic anhydride project lost 78 million yuan. After the divestment, the company will go to battle lightly and focus its energy on projects such as coal-to-ethylene glycol. Valuation and recommendations: We expect the company's profit forecasts for 2013-14 to be 0.31 yuan and 0.49 yuan. The current stock prices corresponding to 2013-2014 PE are 40x and 25x, respectively. The company's coal-to-ethylene glycol project has achieved a real breakthrough and maintained its “recommended” rating.