Investment logic Jinhui Hi-Tech is a representative of domestic wet double pull diaphragm technology, and its leading position is stable: last year's production capacity was about 25 million square meters. After the completion and commissioning of the second phase of this year and the third phase of the project in the first half of next year, the production capacity will exceed 100 million m2/year. Jinhui Hi-Tech is the first company in China to mass-produce wet lithium battery separators, and its products have already entered the middle and high-end markets. Although the listed company has reduced its holdings and is no longer held in preparation for Jinhui's spin-off, we are still optimistic about the excellent attributes of the lithium battery diaphragm business itself and the investment benefits brought to the company by its rapid growth. The new materials business is poised to start - more product reserves are blooming, incubating the next star product: After Guangxin joined in 2009, the company gradually eliminated the backward production capacity of traditional businesses and strategically transformed new materials. In addition to lithium battery separators and polarizers, the company has also stocked high value-added products such as TPE waterproof and moisture-permeable film, photovoltaic PVDF film, environmentally friendly composite film, and composite intelligent energy-saving film. The explosion in the new materials business is worth looking forward to. DuPont Hung's stable performance is still the main source of the company's investment income: technology and product grade are leading in the country. In recent years, it has increased its share of high-end products such as motor films, electrical films, and thick PET films for photovoltaic backsheets. Product structure optimization capabilities are outstanding, and there are plans to continue expanding production capacity in the future. The traditional business cycle is obvious, and the industry is currently at a low level of prosperity: in the second half of 2011, the company's traditional business performance declined due to the downturn in the industry. In particular, PET chips and PVC rolled materials failed to escape losses. There was a month-on-month improvement in the first quarter, but there was still not much improvement. The real estate business started this year: Zhuojing Garden, a project located at No. 9 and 11, Qinggong 3rd Road, Chancheng District, Foshan City (planned construction area of 186,000 square meters), has been officially pre-sold. We expect to start contributing to the company's performance in the second half of this year. The investment proposal does not take into account real estate contributions. We forecast the company's net profit for 2012 to 2014 to be $1.14, 219, and $327 million, respectively, with a diluted EPS of 0.19, 0.36, and 0.53 yuan. Furthermore, we conservatively estimate that the company's real estate business NAV has a reasonable valuation of 2 yuan or more. Considering the leading position and uniqueness of the company's lithium battery diaphragm business, the explosive power of a number of new material reserves, and comprehensive overall and segmental valuation methods, we gave the company a target price of 9.28 and recommended a “buy.”