Overview of Q1 and Q1 results In the first quarter of 2007, the company achieved operating income of 537.37 million yuan, total profit of 47.24 million yuan, and net profit of 26.48 million yuan, up 6.49%, 12.94% and -13.07% year-on-year respectively. The company recorded earnings of 0.04 yuan per share in the first quarter, the same level as the increase in the same period last year. 2. Business Evaluation and Brief Analysis As the company continued to increase the proportion of incoming material processing in the first quarter, revenue growth was relatively steady. Due to the increase in capacity utilization, the company's gross margin for the first quarter reached 24.95%, up 1.17 percentage points from the same period last year, and higher than the average of 23.16% for the whole of last year. However, due to high sales expenses, some of the effects of the increase in gross margin were offset, so operating profit grew slightly faster than operating income, with a year-on-year growth rate of 10.86%. The company's net non-operating income for the current period was 760,000 yuan, which had little impact on profit. The company also purchased a large amount of raw materials at the beginning of the year, which led to an increase in input tax. The tax payable was reduced by 405.25% compared to the beginning of the period. The company continued to purchase fixed assets in the current period, resulting in other accounts payable reaching 94 million yuan, an increase of 31.91% over the beginning of the period. The effective corporate tax rate has increased from 6.65% in the same period last year to 15.34% at present. The main reason is that the “two exemptions and three halves” preferential income tax policies for most subsidiary holding subsidiaries have expired and entered the full tax period. This change has had a great impact on the company's performance. 3. Profit forecasting and investment advice The biggest problem facing companies at present is the increase in tax rates. At the same time, the PET beer bottle market has not yet started on a large scale, and performance cannot be greatly improved in the short term. However, we have seen that since the company is a capital-intensive enterprise, fixed costs account for a large share, and an increase in capacity utilization will help reduce the fixed cost per unit. The company's earnings per share are expected to be 0.19,0.37 yuan in 07/08, corresponding to the price-earnings ratio of 55.5 and 30 times the current stock price, given the company's leading position in the industry and expectations that the company's management capacity will improve after CVC enters the market. It still maintains a short-term “wait-and-see” and long-term “recommended” investment rating.