Recently, we investigated Yushun Electronics' vertical integration industrial park for TFT modules, sensors, and CTP touch panels in Changsha. Focus on understanding the company's pace of capacity release in Changsha and the sales situation. Overall, we believe that the company is currently in an opportunity to launch CTP's vertical integration of production capacity and profit, and suggest actively paying attention to the company's future investment opportunities. CTP production capacity in Changsha has been released, and production is rising rapidly. The company has now achieved a vertically integrated production capacity of 1.5-2 kK/m for CTP. It is expected that by the end of Q2 in 2012, the production capacity of 3 kK/m will be basically put into operation; the entire 4Kk/m CTP production capacity is expected to be put into operation at the end of Q3. In terms of output, with the gradual training of skilled workers and the completion of the initial production run-in stage, the company's production in the second quarter is expected to increase rapidly month by month. We expect the company's average monthly CTP shipment volume in the Q2 quarter to be around 1kK, and the average monthly shipment volume for the Q3 quarter will rise to the level of 2kK. Vertical integration support has been gradually improved. OGS was put into production by the end of the year, and with the company's production capacity of 60,000 large sensors in Changsha (corresponding to a 4-inch production capacity of about 2 kk), the TFT modules, sensors, and lenses currently required for the company's vertical integration can be fully self-supplied. The company is currently actively advancing the progress of the 3kk/MTFT module project in Changsha. It is expected to reach the 2kk/m level by the end of Q3 to support the rising demand for CTP production. The Chibi OGS vertical integration project is expected to be put into operation by the end of 2012. The inflection point in revenue and profit brought by smart phones is expected to occur in Q2-Q3. At the end of last year, the company announced that ZTE Kangxun won the LCM and CTP bids for smart phones in 2012, and the market also had high expectations for the company's revenue. The company lost money in the first quarter due to reasons such as the smart phone product certification cycle and CTP commissioning and production; as most of the product certification has been completed, smart phone approval from the three major operators will also be released in large numbers within the next month or two. We believe that the company's business conditions will improve drastically in Q2-Q3. It is expected that Q2 and Q3 companies' CTP vertically integrated product shipments will be 3KK and 6KK, and the net profit margin will increase steadily as production capacity utilization and yield increase. It has high performance flexibility with a margin of safety. It is recommended to increase our holdings. We estimate that the annual CTP shipment volume is 17-18kk based on a neutral assumption, and the annual revenue is close to 2 billion yuan. With the CTP production capacity in Changsha reaching full production capacity and the release of OGS production capacity in Chibi next year, the company's production capacity for the next two years will support huge revenue elasticity. We carefully consider the growth of the next two years. The 2012-2014 EPS is expected to be 1.28, 2.16, and 3.17 yuan respectively, corresponding to PE this year and next year, respectively. Even considering future increases in issuance, the current stock price has a certain margin of safety, so it is recommended to increase holdings. Risk: Domestic smart phones fall far short of expectations, and the dependence of major customers is relatively high