Comment Jingxing Paper has benefited from rising box board prices, and its performance in the first half of the year was impressive. In the first half of the year, the price of box board and paper continued to be high, and the gross margin level of the enterprise remained at about 17%, driving the company's profit to rise. According to estimates, the gross margin of the enterprise is at the level of about 17%, and the profit of tons of paper is basically around 170 yuan, corresponding to the historical gross margin, which is at the median level. According to our communication with downstream manufacturers of box board paper, at present, the price of box board paper remains strong. On the one hand, the cost of waste paper is rising, and on the other hand, the release of box board production capacity after entering 2010 has reached a low level, leading to the current high price of box board paper. Exports have grown close to 20%, and the supply of box board paper is expected to increase little. It is expected that the boom will continue until 2013. One-third of the demand for box board paper is related to exports, and until June, exports of that month maintained an increase of more than 17%, while the second half of the year will enter the peak export season for light industry products due to the influence of Christmas holidays, etc., packaging demand will rise seasonally, and box board shipments will remain strong. On the other hand, we expect that until 2013, the new production capacity of box board paper will maintain low growth, especially in the Yangtze River Delta region, due to the conversion of 450,000 tons of box board paper machines in the Taicang plant of Jiulong Paper to environmentally friendly cultural paper, while the shipping radius of box board in the Yangtze River Delta region usually does not exceed 200 kilometers. paperboard Supply and demand are tight. Furthermore, according to our estimates, box board will grow by no more than 5 million tons in the next two years, which is lower than the past average, while Nine Dragon Paper's annual report shows that there will be no expansion of box board production capacity until 2013. In the context of leading companies that have stopped expanding, the average small enterprise is unable to increase production drastically due to tight credit and financial strength restrictions, so we expect that until 2013, box board will maintain a relatively good level of prosperity, and Jingxing Paper will benefit. Maintain an increase in holdings rating, with a target price of 8.80 yuan. The company has benefited from the expansion of box board paper production capacity into a period of slow growth, and future supply and demand will maintain prosperity. At the same time, the Zhejiang region where the company is located has entered a power limit period, and some regions have implemented measures such as opening 4 stops 2, 5 stops 3, etc., and the company's electricity supply is guaranteed. We expect the company to benefit from the power limit process, predicting that the EPS for Jingxing Paper in 2011 and 2012 is 0.49 yuan and 0.74 yuan. The profit growth in 2012 mainly comes from enterprise technology reform and improvement in production capacity utilization. The valuation level of most paper companies is around 12X. Since the company's future profit growth rate is relatively fast, it is given a certain level, According to our price-earnings ratio of 18 times in 2011, our target price is 8.80 yuan.