The sharp increase in management expenses in the fourth quarter caused the performance to fall short of expectations. In 2011, the company achieved revenue of 3.45 billion yuan, an increase of 31.3% over the previous year; realized net profit of 125 million yuan, an increase of 1.1% over the previous year, and a fully diluted EPS of 0.23 yuan, lower than our expectations. The allocation programme is to transfer 10 shares for every 10 shares. The main reason why earnings fell short of expectations was that management expenses in the fourth quarter reached 65.97 million yuan, significantly higher than the level of 17.08 to 19.17 million yuan in the previous three quarters, that is, management expenses for the quarter exceeded 23.4% of the total of the previous three quarters. The additional subjects include technology development expenses of 50.53 million yuan, but there were no such expenses in the previous year. The obvious homogenization characteristics of commodity products in the paper industry make huge R&D expenses unnecessary; the company may have another purpose in expanding the R&D revenue ratio. The economic downturn makes it difficult to reverse revenue growth in the short term. The main contribution comes from the 250,000-ton white-faced cow card project that was newly put into production. Revenue from this product increased 4.3 times from 78.73 million yuan last year to 420 million yuan; in addition, revenue from cowhide boxes and board also increased by 21.5%. In addition to being affected by the management expenses mentioned above, the increase in the company's revenue and lack of profit is also an important reason for the further decline in product gross margin. The company's consolidated gross margin was 14.0%, down from 15.0% last year. Among them, the gross margin of box board paper, which accounts for a relatively large share of revenue, fell to 13.5% from 16.0% last year; white-faced beef cards fell from 15.6% to 13.0%. Due to the rapid expansion of production capacity in the industrial wrapping paper market in recent years, it is difficult for the industry boom to improve in the short term. Operating efficiency has improved. The turnover of accounts receivable of financial health companies fell from 73 days last year to 57 days, and inventory turnover fell from 58 days to 53 days. The company's debt ratio fell to 45.8% at the end of the year after the targeted increase last year, and short-term debt repayment indicators were also at a reasonable level. Furthermore, the company has stepped up its cash recovery efforts. The net operating cash flow for the year was 115 million yuan, significantly better than the previous year's 45 million yuan. Risk suggests that targeted additional household paper projects are progressing slowly, and the investment progress is only 5.4%; excess expectations in the industrial packaging paper industry continue. Growth momentum needs to be strengthened to maintain a “neutral” rating. We believe that the company's profit in the next two years will be mainly driven by the 250,000 ton project reaching production, yet it is difficult to predict when the 68,000 ton household paper project will achieve stable profits for the time being. The 2012-14 EPS is expected to be 0.33/0.44/0.48 yuan, and PE is 20/15/14x, maintaining a “neutral” rating.