Revenue growth exceeded expectations, but operating results fell short of expectations. The company achieved operating income of 10.09 billion yuan (+34.9%) in 2011, net profit attributable to shareholders of listed companies of 210 million yuan (-2.41%), and a profit of 0.32 yuan per share. The company's revenue growth rate exceeded expectations, mainly due to the year-on-year increase in product prices, but on the other hand, earnings per share of 0.18 yuan after deducting non-recurring profit and loss, were lower than our expectations, mainly due to a 2.8 percentage point drop in gross margin and an increase in the corporate income tax rate from 2.5% last year to 16.2%. The expense ratio and balance ratio have all declined, and operating cash flow has declined. In 2011, the company's three expense ratios fell to 5.1% from 6% last year, and the balance ratio dropped from 56.2% to 52.g%. However, on the other hand, the company's operating cash flow decreased by 530 million yuan (-73.5%) over the same period last year due to increased procurement of engineering materials and payment of labor costs for the 500,000 ton CPP technical improvement project. Product production and sales were stable in 2011, and the supply and demand structure of the industry deteriorated further in 2012. In 2011, the company's leading product sales volume was 180,000 tons of caustic soda (-l-20,000 tons), 120,000 tons of paste resin (-l-30,000 tons), 150,000 tons of gasoline, 100,000 tons of diesel, 40,000 tons of propylene, 200,000 tons of acrylic acid and esters, and 60,000 tons of polyethylene (+13,000 tons). In 2011, the domestic industry's production capacity growth rate did not decrease. It is estimated that paste resin production capacity will be increased by 290,000 tons, with a total production capacity of nearly 1 million tons; butyl acrylate materials will increase production capacity by 260,000 tons, with a total production capacity of 1.21 million tons. The downstream demand momentum is insufficient, and the contradiction of oversupply is prominent. Risk factors: the risk that the continued economic downturn will affect the company's profits; the risk that the progress of factory relocation will slow down the operating rate of the company's installations; the risk that the industry's profit falls short of expectations due to high new supply pressure on major products. Profit forecast, valuation and investment rating: In 2012, the company's main work was factory relocation, and installation commencement may be slightly affected. Coupled with the trend of deterioration in the supply and demand structure of the acrylic acid, ester, and resin industries, the company's 2012-2013 performance forecast was lowered to 0.28/0.48 yuan (originally 0.48/0.68 yuan, 2011 EPS was 0.32 yuan). The current price was 5.95 yuan, corresponding to 2012-2013 PE21/12, PB was 1.2/1.1 times, maintaining the “gain” rating.