The market sees the company's product BDO as a major product in the coal chemical industry, and believes that in the next few years there will be a large increase in production capacity, and there will be excess production capacity in the industry. After analysis, we found that the actual production capacity next year may be lower than expected, and due to “short-term expansion of spandex production, THF demand is growing faster in the medium term”, and demand may be better than expected. The company is basically oriented towards positive changes, so it is recommended to pay attention to it. Demand: Due to the high boom in the industry, the new domestic production capacity of spandex was about 5-10 million tons, and the additional production capacity required 40,000 to 80,000 tons of PTMEG (downstream products of BDO). Next year, PTMEG will add only 76,000 tons (all in the second half of the year), and the supply and demand fundamentals are relatively good, especially in the first half of the year. In addition, demand for BDO's downstream THF other than PTMEG is also growing, especially as a pharmaceutical intermediate. The second increase in demand is on the downstream product PBT. Yizheng Chemical Fiber will have a new 60,000-ton plant by the end of next year. Since PBT synthesis requires high BDO quality, the maleic anhydride method BDO is generally used. Currently, only the company and Blue Star 2 companies in China have maleic anhydride products. Hydrogen or coke oven gas must be used in the BDO production process. The current shortage of supply affects the operating rate. This is the company's bottleneck. The current operating rate of the new BDO unit is only about 40%. If the operating rate of the steel companies surrounding the company improves and the supply of coke oven gas increases, the company's performance may exceed expectations. Foreign BDO is mainly a maleic anhydride method (petroleum route). If oil prices rise and price differences increase, it will cause exports of some domestic products, thereby affecting domestic prices. The company is benefiting from the rise in oil prices. Investment advice: The company's profit has improved from the bottom, and there is a possibility that it will exceed expectations to a certain extent (solving the coke oven gas bottleneck, oil prices affecting BDO prices, and demand exceeding expectations). Furthermore, in the long run, there is a possibility that the downstream BDO will have new demand. The company's “12th Five-Year Plan” revenue reached 10 billion dollars in 2015, which is equivalent to 3 times the current level, and the company may extend the industrial chain in the upstream and downstream directions. It is recommended to pay attention. The recommended ratings for the company predicted that the company's 10-12 EPS would be 0.05, 0.62, and 0.73, respectively. In terms of flexibility, the impact of the BDO spread change of 1,000 yuan/ton on the company's EPS was 0.19 yuan. Risk Warning: Demand falls short of expectations, company management risk.