The performance was basically in line with expectations: the company's performance report revealed that the operating income for 2011 is expected to be 3.71 billion yuan, an increase of about 32.42% over the previous year; net profit attributable to the parent company was 580 million yuan, an increase of 19.13% over the previous year, and the diluted earnings per share were about 0.91 yuan, which is basically in line with our previous expectations. The operation of high oil prices favors calcium carbide PVC: Judging from simulated gross profit, the calcium carbide PVC industry has been at a break-even point since the fourth quarter of last year. However, the recent rise in oil prices has boosted the cost of ethylene PVC, which is beneficial to calcium carbide PVC. At the same time, the effects of dealer inventory replenishment after spring and the recovery in real estate sales data will lead to an improvement in demand for PVC. Calcium carbide has achieved self-sufficiency, benefiting from higher electricity prices: the company's calcium carbide production capacity will reach 500,000 tons by the end of the year, making it basically self-sufficient in calcium carbide. In the context of the country's increase in electricity prices, the company has basically achieved self-sufficiency in electricity, enjoying a clear cost advantage over the same industry. 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. Relying on regional resource advantages, the company will build three major production bases to develop the coal chemical industry. It is expected to expand capacity to 720,000 tons of PVC, 1 million tons of calcium carbide, and 500,000 tons of caustic soda by the end of 2012, doubling production capacity. The price of caustic soda is running at a high level: The caustic soda market is running further for the better. The market support points are the electricity restriction policy and the country's increase in electricity prices. Affected by this, the operating load of chlor-alkali enterprises has decreased, resulting in limited supply in the caustic soda market, but it has no impact on the commencement of construction by enterprises with their own electricity. At the same time, demand from downstream alumina and other industries is good, which ensures the stable operation of the domestic caustic soda market. However, due to monetary tightening, traders and downstream manufacturers had almost no inventory until spring. It is expected that the effect of stock replenishment will continue, and product prices will remain strong. Maintaining an A-A rating for increased holdings: Long-term optimism is that companies rely on resource and cost advantages to gradually improve the industrial chain, and there is huge room for growth. Short-term optimism about the rebound in product prices brought about by the inventory supplement effect spawned a month-on-month increase in the company's performance. Maintain an increase in holdings - A rating, according to 2012 20PE, with a target price of 23.04 yuan for 3 months. Risk warning: demand recovery is slower than expected; new production capacity is difficult to digest