Research conclusion: Leading box board paper companies have stopped expanding, and power restrictions are expected to have a positive impact on the company. Looking at demand, we believe that demand for wrapping paper is positively correlated with industrial value added and export performance. Currently, domestic industrial value added and export data still maintain a relatively rapid growth trend, and there is no need to worry too much about packaging paper demand. On the other hand, as the main force in the expansion of the box board market, Nine Dragon Paper has begun to slow down the pace of expansion. In the next 2 years, Nine Dragon Paper's expansion will focus on fields such as cultural paper and white board paper. The production capacity of box board paper will only continue to expand in 2013 (see Table 2). At the same time, electricity restrictions are a short-term catalyst. Historically, the paper industry generally outperformed Shanghai and Shenzhen 300 during the power limit period. This is because most of the medium and large paper companies had their own power plants, and during the power limit period, large enterprises were more favorable, and the production of small to medium paper mills was restricted. Although the company did not have its own power plants, the thermal power plant in the Pinghu region expanded production with new units this year, so the company's electricity restrictions are likely to be very small, and will benefit from electricity restrictions in Zhejiang. The fund-raising project reached production in 2013, and toilet paper varieties were introduced to reduce the company's business risks. The price of the fund-raising project this time will be no less than 6.23 yuan/share, raising no more than 950 million yuan. It is estimated that no more than 160 million shares will be issued, of which Mr. Zhu Zailong, the controlling shareholder of the company, will subscribe for no less than 5 million shares. The capital raised will be invested in 68,000 tons of environmentally friendly toilet paper projects. Although more toilet paper projects will be added in the next two years, the company's production at the end of 2012 avoided the peak period of additional production capacity, and the products mainly use waste paper as raw material, which has a strong cost advantage. We estimate that the company's cost savings compared to similar toilet paper using wood pulp is more than 1/3. The shareholding company Sharp Ace has reported that it is expected to contribute 270 million yuan in investment income after listing. The main products of Sharp Ace are eye drops, large infusions and other general medicine products. The company's net profit from 2008 to 2010 was 18.0599 million yuan, 19.084 million yuan, and 43.052 million yuan, respectively. The net profit for 2011 is expected to reach 60 million yuan. Based on the calculation of 25% of shares issued after listing, the company's diluted EPS in 2011 is expected to be about 0.91 yuan. According to the pharmaceutical industry's dynamic price-earnings ratio of 30PE in 2011, the market value of Sharp Ace held by Jingxing Paper is about 270 million yuan, which is equivalent to the company's current market About 10% of the value. For the first time, the company was given an increase in holdings rating. The company benefits from the expansion of box board paper production capacity into a period of slow growth, and future supply and demand will be repaired. At the same time, the Zhejiang region where the company is located will enter a power limit period in June. Since the company's electricity supply is guaranteed, it is expected to benefit from the power limit process at that time. We predict that Jingxing Paper's 2011 and 2012 EPS will be 0.49 yuan and 0.74 yuan respectively. The profit growth forecast for 2012 is mainly due to the improvement in corporate technology and capacity utilization. The valuation level of most paper companies is around 12X. Since the company's future profit growth rate is relatively fast, we will give a certain premium level, according to 2011 The price-earnings ratio is estimated at 18 times a year, and the corresponding target price is 8.8 yuan. Risk factors: The decline in exports increased, causing the demand for box board paper to fall short of expectations