The company recently announced the 2010 annual report and the 2010 first quarter results report. In 2010, the company achieved operating income of 1.1 billion yuan, an increase of 15% over the previous year, realized net profit of 345 million yuan, net profit after deducting non-recurring profit and loss of 125 million yuan, and earnings per share were 1.12 yuan and 0.41 yuan respectively. In 2010, the company's comprehensive gross margin fell 5.8 percentage points to 32.6%. The main reason for the decline in profitability was rising costs. The main raw materials for the company's textile additives were petrochemical products, which accounted for more than 60% of production costs. Prices of petrochemical products fell sharply due to the 2008 financial crisis, and the company's comprehensive gross margin in 2009 was 6 percentage points higher than in previous years. Judging from the current trend in crude oil prices and petrochemical product prices, this advantage no longer exists. At present, the company's overall gross margin level has returned to a normal level, and the next few years will rely on technological progress and the growth of the textile printing and dyeing market to maintain the company's growth. In 2010, due to the company's outstanding investment in the primary securities market, it achieved a net investment income of 251 million yuan, accounting for more than 60% of operating profit. In the future, this will still contribute benefits, but the share will gradually decrease. In the first quarter of 2011, the company's revenue declined year on year, and the overall gross margin level dropped another 2.5 percentage points compared to last year's full-year level. The situation is not optimistic. We expect that as the price of petrochemical products rises, leading to an increase in costs, the company will adopt price increases to cope with the pressure of rising costs. The company's earnings per share for 2011, 2012 and 2013 are expected to be 0.84 yuan, 1.02 yuan, and 1.24 yuan, respectively. Future investment income will still account for about 40% of the profit contribution. After deducting investment income, earnings per share in 2011 were about 0.5 yuan, corresponding to the current price-earnings ratio of 26 times, which is slightly lower than the average of the chemical industry. Therefore, we are still giving it a “Recommended” rating.