Annual results were in line with expectations, with 10 transfers of 1 yuan, 2011 revenue of 3.708 billion yuan (+32.42%), net profit attributable to the parent company of 579 million yuan (+19.13%), EPS 0.90 yuan, net profit after deduction of 526 million yuan (+15.25%), or 0.82 yuan per share. ROE was 13.67%, operating cash flow +0.24 yuan/share. The distribution plan for 2011 is to transfer 10 additional shares for every 10 shares, with a dividend of 1 yuan. The decline in 4Q11's month-on-month performance was due to a decrease in gross profit and loss of investment income, yet Inner Mongolia's Junzheng achieved revenue of 867 million yuan in 4Q11, a decrease of 13.75% over the previous month. Net profit attributable to the parent company was 99 million yuan, down 31.14% from the previous month, and EPS 0.15 yuan. The reason for the fluctuation in net profit levels in the fourth quarter was a decline in gross profit and loss of investment income. Downstream demand was sluggish, and PVC market prices continued to be sluggish. As a result, the company's gross margin fell from 29.56% in the third quarter to 24.96%, gross profit for the single quarter fell from 297 million yuan to 216 million yuan, net investment income loss of 27 million yuan in the fourth quarter, non-operating income of 52 million yuan, and the net profit level attributable to the parent company decreased by about 45 million yuan. Eliminate backward production capacity and concentrate on the construction of the three major production bases, the entire PVC/caustic soda production line with an annual output of 55,000 tons in the old factory area of Junzheng Chemical. In line with the country's industrial policy of shutting down backward production capacity and saving energy and reducing emissions, the company will concentrate resources to build the three major production bases in Wuhai, Ordos, and Xilingol. The doubling of production capacity will drive the company's scale growth. The company's total reserves of coal resources are over 2.8 billion tons, mainly distributed in the Wuhai region, Ordos region and Xilingol region. The amount of resources is being expanded in the integration of coal resources in Inner Mongolia, and coal chemical projects are being built based on coal resources. Risk suggests that downstream demand for PVC is sluggish, and price fluctuations have a big impact on the company's profits. There is a possibility that the price level will be lower than expected; the price of caustic soda is relatively high, and fluctuations in downstream demand may cause fluctuations in profit levels. The leading position is prominent. Companies that maintain the company's “recommended” ratings face opportunities to build a national energy base in Inner Mongolia and promote the rapid development of the coal chemical industry, which may benefit from the integration of coal resources in Inner Mongolia. Relying on the resource endowments of the Inner Mongolia region to build an integrated industrial chain, the construction progress of production bases in Ordos and Xilingol is likely to exceed expectations. We adjusted the company's profit forecast for 12-14 to 0.91, 1.27, and 1.32 to maintain the company's “recommended” investment rating.