The medium- to long-term investment logic is that box board paper is improving: taking into account new production capacity and elimination of backward production capacity, China's boxboard/corrugated paper production capacity increased by 1.34 million tons in 2011, a net increase of 1.85 million tons in 2012, an average annual increase of 1.6 million tons, and the net increase in production capacity is at a low level compared to the past few years. Demand for box boards/corrugated paper will increase by 3.5 to 4 million tons per year. The supply and demand of box boards/corrugated paper will continue to improve over the next 2 years, and the number of enterprises starting construction will rise. We expect the operating rate of the boxboard/corrugated paper industry to reach 90.3% in 2011 and 91.9% in 2012; eco-friendly household paper is a very promising product: eco-friendly household paper is a household paper widely used in Europe, America, Japan, etc., accounting for more than 50%, but it is still a new thing in our country, with a short development history, and a very small share. Environmentally friendly household paper uses imported US waste 37 #及国产办公废纸为原料. According to current waste paper prices, the cost is 20%-30% lower than that of major domestic household paper companies, and the cost advantage is obvious. Environmentally-friendly household paper conforms to the development concept of a circular economy and helps promote the company's products. The sales personnel recruited by the company have many years of experience in household paper, fast sales and other industries, which can ensure the rapid expansion of the company's product channels; the investment suggests that the company's net profit for 2011-2013 was 182, 237, and 306 million yuan, and EPS was 0.464, 0.604, and 0.779 yuan respectively. Assuming the company issues 160 million additional shares, the corresponding EPS are 0.33, 0.43, and 0.55 yuan, respectively. Considering the improvement in the main business, the good prospects for new products in the future, and the benefits that equity investment may bring in the future, we gave the company a “buy” rating. The target price is 8.6 yuan, which is equivalent to 20 times PE in 2012. Risk The industry risk of box board paper; the marketing risk of environmentally friendly household paper.