In 2010, the company achieved operating income of 1,407 billion yuan, up 30.7% year on year; operating profit of 124.66 million yuan, up 119.4% year on year; achieved net profit of 77.44 million yuan, up 44.9% year on year, achieved a basic EPS of 0.166 yuan; and implemented a profit distribution plan of 1 yuan per 10 shares. There was a marked differentiation in product profitability. The company is one of the leading enterprises in the plastic packaging film industry in China. It is mainly engaged in the production and sale of BOPP and BOPET films. In 2010, as the prices of major upstream chemical raw materials rose, the company's product prices also increased, which led to a 30.07% year-on-year increase in operating income; however, changes in the market supply and demand structure have clearly divided the profitability of products. On the one hand, BOPP film is in a competitive pattern of overcapacity. Facing the rise in raw material prices, the profit margin dropped 4.03 percentage points to 11.05% year on year; on the other hand, as the US resumed imports of BOPET film from China, economic recovery in developed countries increased demand for products, and the application field of BOPET film itself broadened, in 2010 BOPET film was in short supply, and prices continued to rise. The company's gross margin of BOPET film increased 16.91 percentage points year on year to 31.46% year on year. Due to the long construction cycle of production lines, the industry will still be in a vacuum period of capacity release, and we expect BOPET film's boom to be maintained until at least 2012. The additional production capacity will be put into operation one after another. The company's fund-raising project with an annual output of 12,000 tons of ecological food (BOPP/PP) composite film technology improvement project and a new functional BOPET packaging film construction project with an annual output of 60,000 tons are expected to be put into operation at the end of May 2011 and the end of December 2011, respectively. Revenue is expected to double from 2009 after full release of production capacity; at the same time, the company's holding subsidiary Ningbo Wanxiang purchased two new BOPP film production lines from Germany, further expanding the production capacity of Ningbo Wanxiang capacitive film. It is proposed to raise capital to enter the field of new energy films. On January 31, 2011, the company announced that it plans to raise capital for an ultra-thin capacitor film project with an annual output of 8,000 tons, a lithium battery separator project with an annual output of 60 million square meters, and a solar cell packaging material project with an annual output of 120 million square meters. We are optimistic about this project. Profit forecasting and investment ratings. The company's EPS is expected to be 0.28 yuan and 0.54 yuan in 2011-2012. Based on the closing price of 9.57 yuan on January 29, the corresponding dynamic PE is 35 times and 18 times, respectively. We are optimistic about the profitability of the company's new production capacity, raised the company's investment rating to “increase holdings”, and prompted investors to pay attention to the trading opportunities of the stock price to follow the lithium battery and solar cell concepts. Risk warning. 1. Competition in the industry is fierce, which has a great negative impact on the company's profitability; 2. The risk of sharp fluctuations in raw material prices.