Description of the incident Tianhong Fund, a shareholding subsidiary of the company, announced that Tianhong Zenglibao (or Yuibao), an exclusive partnership with Alibaba, has exceeded 100 billion yuan and opened more than 29 million accounts, making it the first fund in the history of domestic funds to break the 100 billion mark. We have the following comments on this: Incident review short term: Although Yubao is booming, its impact on the company's profits is still very limited. Balance Pay is a balance value-added service jointly created by Alipay and Tianhong Fund. Alipay users can purchase the Zenglibao monetary fund owned by Tianhong Fund with funds left on Alipay. Currently, Yubao's scale has exceeded 100 billion dollars. Assuming that fund management fees and sales service rates remain unchanged, Tianhong Fund's net interest rate remains unchanged, Tianhong Fund can increase annual revenue by 348 million yuan and achieve net profit of about 48 million yuan, thus contributing about 17 million yuan in profit to the company. It does not account for much of the company's profit, nor does it contribute much performance elasticity. Medium to long term: The rapid development of Yubao, especially similar businesses, will become an important growth pole for the company's profits. With Alipay's powerful platform, Internet finance will drive Tianhong Fund's fund size growth. We assume that Yubao, or funds similar to Yubao, can reach a scale of trillion dollars, thereby contributing 3.48 billion yuan in annual revenue to Tianhong Fund and 480 million yuan in net profit, which in turn contributes 170 million yuan in investment income to the company. Other businesses remain unchanged based on the 500 million profit forecast in 2013, and the share of Yubao's performance can reach 25%, showing performance flexibility. The chlor-alkali industry will still be at the bottom. The company has the advantage of low cost and strong resilience to risks, and is expected to enjoy a feast when the industry is booming. The company is located in Wuhai, Inner Mongolia, and is rich in surrounding resources. The company has “coal-electricity-chlor-alkali” and “coal-electricity-ferrosilicon” recycling industries, and can use coal resources to generate its own electricity, which has a strong cost advantage. We believe that in terms of industry attributes, the chlor-alkali industry as a whole will still hover at the bottom. First, there is still a lot of new production capacity in the industry. Second, although the country will step up efforts to remove excess production capacity in traditional industries, the execution strength and scale are yet to be seen. The company is expected to achieve EPS of 0.38 and 0.45 yuan in 2013-2014, corresponding to PE31, 27 times, and will not be given an investment rating yet.