The company's performance is expected to be released in '13. The market generally believes that the company's touch screen technology level is below the industry average, that product quality is not recognized by core customers, and that performance is difficult to release. Unlike market views, we believe that the company has passed the CTP technology climbing period. Against the backdrop of the 13-year industry boom, with the advantages of integrated processes, it is expected to usher in an inflection point in performance release. The completion of the yield climb is expected to achieve the first profit after the touch screen is put into production. 1) We judge that the company has completed a yield climb in 12Q4. The company achieved revenue of 420 million yuan in a single quarter in 12Q4, an increase of 113% over the previous month; of these, sales to ZTE reached 290 million yuan, an increase of 165% over the previous year, accounting for 52% of the annual sales volume. The sharp improvement in revenue shows that the company's products have been recognized by major customers, and it is expected that the company has completed a rise in yield, including product quality and process improvements. 2) It is estimated that the 12Q4 gross margin was affected by poor quality product sales in the early period and failed to reflect its profitability after normal delivery, and it is expected that the 13Q1 gross margin will improve significantly; considering the 12Q4 one-time inventory impairment preparation, 13Q1 is expected to achieve the first profit after the touch screen is put into production. In the context of the 13-year boom in the industry, subsequent performance was flexible. 1) We believe that '13 is the first year of large screen touch screens, and that production capacity for large-screen touch screens will continue to be in short supply for at least 14 years; the trend towards larger screens will take up a large part of the production capacity of existing touch control production lines and drive a rise in the prosperity of the small to medium touch screen market. 2) We estimate that the 12Q4 company's supply to ZTE is still only 70% of its planned volume at the beginning of the year. Considering the off-season effect in the first quarter, the capacity utilization rate for 13Q1 is expected to be less than 60%. With the completion of the rise in yield, the company's share of ZTE's supply is expected to gradually recover. 3) It is expected that the company's touch screen production capacity will double in 2013 to meet ZTE's demand (ZTE plans to increase smart phone shipments by 50% to 50 million units in 2013) and expand domestic second-tier brands such as Hisense and Konka. The company has the advantage of an integrated process, and the yield will gradually become apparent after climbing. The company has integrated display processing capabilities including cover glass, touch sensors, touch modules, and LCM. The direct delivery rate is expected to be over 80%, making mass production profitable. As the yield of each product is gradually optimized, the advantages of the integrated process such as low cost, customization, and rapid response will gradually become apparent. Technological progress will be the key to long-term growth. OGS is the development direction of GG technology. Although the company already has various core processes, improving the yield of later stages of the process has always been a problem in the development of the industry. It is expected that at present, the company has sent samples of OGS products, but the yield is still poor. We believe that whether it can keep up with the growth of the industry in the future will directly affect its ability to take orders sustainably. The estimated revenue for the 12-14 year period is 1,007 billion yuan, 1,866 billion yuan, 2,229 million yuan, net profit is 122 million yuan, 54 million yuan, and 98 million yuan, and EPS is -1.66 yuan, 0.73 yuan, and 1.34 yuan. Risk warning: 1) Big customer risk: ZTE's sales volume is poor; 2) customer development risk: customized products are not recognized by many major customers; 3) technical risk: poor development of new touch control technology.