Key investment points: Taiwan-funded enterprises focusing on electronic grade epoxy resins. The company is a subsidiary of Hongren Enterprise Group controlled by Wang Wenyang, the eldest son of Wang Yongqing, the god of **** business. It mainly engages in R&D, production and sales of electronic grade epoxy resins. The products are mainly sold domestically, mainly in the fields of electrical and electronic insulation, coatings, composite materials, building materials, and adhesives. The profit level of the epoxy resin industry is at a low point, and expectations are extremely positive. The industry's difficulties mainly come from the supply and cost aspects. Due to technical barriers and low concentration and the investment boom in 2009, the industry's production capacity utilization rate continues to decline. In addition, crude oil prices have driven prices of bisphenol A and propylene oxide, the main raw materials, and the industry's gross margin level has declined for three years. Currently, it is as low as about 5%. The loss area of the entire industry has expanded, and expectations are extremely negative. Industry demand can continue to grow steadily. On the demand side, driven by the growth of downstream electronics, electricity, coatings, and composites, global demand for epoxy resins is expected to grow by 3.5% in the next few years. Benefiting from industrial transfer, the annual growth rate of domestic demand is expected to reach 10%, and R&D and customer advantages are strong. The company has products with relatively high gross profit, such as halogen-free flame retardant epoxy resins for high-grade copper clad plates. It has passed authoritative certifications such as the US FDA, EU RoHS, and Germany's Lowe's, etc., and has the only electronic grade epoxy resin key engineering research and development center in South China, with outstanding R&D advantages. As one of the first companies to enter the epoxy resin industry, the company has accumulated more than 2,000 customers and nearly 4,000 potential customer data. Well-known companies such as SONY, Dell, HP, Samsung, Lenovo, and NOKIA have all become company customers. Profit forecasting and valuation. The 2012-2014 EPS is expected to be 0.16 yuan, 0.17 yuan, and 0.25 yuan respectively, the inquiry range is 3.2-3.6 yuan/share, the issuance price-earnings ratio is 32-36 times, and the corresponding price-earnings ratio of the 2012 EPS is 20-22.5 times. The valuation is reasonable, so it is recommended to wait and see. risk factors. The inflection point of the industry has been slow to arrive; raw material prices have risen sharply; fund-raising projects are progressing slowly, or production capacity is difficult to be digested by the market after production is put into operation.