Ethylene glycol has achieved mass production and sales, and technological breakthroughs are beginning to bear fruit. In 2012, the company produced and sold about 100,000 tons of ethylene glycol and nearly 50,000 tons of oxalic acid. The comprehensive operating rate reached 63%, and the year-end load reached more than 85%. Considering that the problem of continuous production and light transmittance of ethylene glycol was mainly solved in the fourth quarter, and that its annual report compared with the third quarter, accounts receivable and inventory items were basically stable, it can be initially assumed that the company achieved mass production and sales of ethylene glycol. We believe that the core problems of the company's coal-to-ethylene glycol process at the technical level have basically achieved a breakthrough. In 2012, ethylene glycol was sold at a bargain price, and the cost was relatively high. An examination of the company's ethylene glycol sales situation shows that in 2012, the company achieved an average price of 5,961 yuan/ton for ethylene glycol, which is lower than the average price of ethylene glycol for the whole year of 2012 of 6,647 yuan (the market price of ethylene glycol was higher in the second half of the year). It can be seen that sales of the company's products were achieved through a strategy to occupy the market through discounts. Judging from the cost structure, the average cost of ethylene glycol per ton is 5,658 yuan/ton. In the cost structure, raw materials (mainly coal+catalysts) are about 3,000 yuan, and depreciation plus others (which should be repairs, etc.) is about 1,800 yuan, accounting for the main proportion, which is basically in line with our previous report estimates. Three major challenges in 2013: improving the cost structure, stabilizing the operation of the device, and obtaining downstream approval. We believe that the company's main challenges in 2013 are three: one is to reduce costs by introducing cheap raw materials and expanding production through technological improvement. We estimate that the cost of space that can be compressed is 1400-1,600 yuan. On the one hand, the company is trying to find cheaper raw materials for lignite. On the other hand, the company's annual report also plans to invest 300 million yuan in 2013 to expand the 200,000 ton plant in Tongliao to 300,000 tons, so tonne depreciation is expected to be reduced by 4-500 yuan/ton under full production conditions. The second is to stabilize the operation of the device. Although the core technical problems of the company's ethylene glycol have been broken through, engineering issues such as the long-term operation of the device and stable product quality may still require a period of debugging and accumulation. Third, at present, the company's products are still achieving sales volume through discount methods, especially downstream polyester companies. Currently, they are still in the product trial stage. Considering the important influence of ethylene glycol quality on the PET synthesis process and product quality, it is estimated that downstream approval will take a period of time (we expect it to take at least half a year).