Investment advice: In 2012-2014, the company's EPS is expected to be 0.10 yuan, 0.68 yuan, and 0.75 yuan respectively, and the PE corresponding to the current stock price is 67.0 times, 10.1 times, and 9.1 times. Since spandex prices have the potential to rebound, real estate project settlement brings short-term performance expectations, giving it a “recommended” rating. Key points: Significant increase in performance: The company released a performance forecast. It expects net profit attributable to shareholders of listed companies to be 39 million to 48 million in 2012, an increase of 270.72%-356.27% over the previous year, equivalent to an EPS of 0.095 yuan to 0.117 yuan. If the real estate project settlement for the first quarter of 2013 is 50%, not considering the spandex business, then we expect the EPS for the first quarter to be around 0.31 yuan. Partial settlement in the real estate business is the reason for the sharp increase in performance: the “Shudu Center” urban complex D7 plot development project developed by Chengdu Shudu Yintai Real Estate Co., Ltd., a wholly-owned subsidiary of the company, is doing well. According to the terms of the sales contract, the commercial housing in the project was handed over on December 27, 2012. The income corresponding to the houses delivered was included in current profit and loss, with a profit of about 78 million yuan to 95 million yuan, which is the reason for the sharp increase in this year's performance year over year. Housing delivery settlement guarantees 2013 performance: According to the company's 2012 interim report, the total pre-sale amount of the “Shudu Central” urban complex D7 plot development project has reached 1.61 billion yuan (the advance payment for the third quarter report has exceeded 1.7 billion yuan). Simply calculated based on the average net interest rate of 15%-20% for real estate projects, the 1.7 billion advance payment alone would bring in net profit of 255 million to 340 million yuan, equivalent to an EPS of 0.62 yuan to 0.83 yuan. Furthermore, sales of the D7 plot project are stable, and it is expected that the D3 plot and subsequent projects will gradually be rolled out. Guarantee the subsequent growth of the company's performance. If the spandex business recovers, it is more resilient: the company's main business was 30,000 tons of spandex and spandex coated yarn. Excessive domestic production capacity has caused spandex to continue to be sluggish, which is also the main reason for the company's losses in recent years (in 2012, the spandex business is still expected to lose 38 million to 45 million). Currently, spandex is at the bottom of the business cycle. Once it recovers, the company is very elastic. We estimate that for every 3,000 yuan/ton increase in spandex price, the company's EPS will increase by 0.14 yuan. However, the coated yarn business has always had sufficient orders, mainly for women's underwear, underwear, stockings and other fields. The production capacity has expanded from 1,000 tons to 1,800 tons, and the profitability is high. Risk warning: spandex continues to be sluggish, delivery progress is later than expected, and real estate project settlement progress is lower than expected.