Research purpose: Recently, we investigated Dayilong and communicated with the company's leadership about future business plans and development strategies. Key investment points: The leading domestic-owned beverage packaging machinery company with excellent growth is a leading enterprise in the beverage packaging machinery manufacturing industry in China, and is the largest enterprise with the most complete product chain and scale in the domestic beverage packaging industry. The company's technology is close to foreign products. The product price is only 1/3-1/2 of foreign products, and there is huge room for import substitution. The growth in the company's performance is quite clear. The expansion of the downstream beverage and daily chemical industries has brought sufficient orders to the company; moreover, the company recently established an American branch to further explore high-growth beverage consumption markets in Latin America. Import substitution and steady expansion of overseas business are important sources for the company's future performance growth. PET lightweight bottle technology equipment is expected to grow rapidly. The company is the first in China to successfully develop lightweight bottle blowing equipment, and is the first domestic company that can produce integrated PET lightweight bottle blowing, filling and spinning equipment. Lightweight bottles can save costs for beverage manufacturers and are the only way for PET bottles to become low-carbonized. The company's lightweight bottle blowers and fillers will benefit. In addition to foundry Coca Cola ice cream, we are optimistic about the market expansion prospects for lightweight bottle blowing and filling machinery, and are expected to maintain high growth over the next two years. The contract processing business is progressing steadily, and the company that accelerates the import of products has now identified 3 generation processing lines, and they are all preferred big brand customers. Among them, the revenue from the Shenzhen ice cream processing project is stable, the Hefei ice dew project will also contribute performance next year. The Xinjiang Jianlibao Line is expected to contribute 10 months of performance next year, and it is expected that the remaining 2 foundry lines of the fund-raising project will be completed by mid-next year. The 5-generation processing line will become the company's model project, and the company's excellent technical strength will be further recognized by customers, enhance the brand awareness of products, and speed up the import substitution of products. Valuation and investment suggestions As a leading domestic liquid packaging machinery leader, its excellent technical strength and contract processing business model will contribute to the improvement of the company's brand image, further expand the market, and obtain more space for import substitution and overseas markets. We expect the company's EPS for 2011, 2012, and 2013 to be 0.29, 0.40, and 0.52 yuan respectively. Considering the relatively determined high growth in the company's performance next year, we will give it a target price of 30X P/E and 12 yuan for 2012, giving it a “buy” rating.