Longxing Chemical is an enterprise engaged in the production and sale of carbon black. Its products are used in tire manufacturing, rubber product manufacturing, and ink production. The production scale and profitability are at the leading level in the domestic carbon black industry. Currently, it has 7 wet carbon black production lines with an annual carbon black production capacity of 200,000 tons. It also has three sets of carbon black exhaust gas generator sets, with a power generation capacity of 21 megawatts. 95% of the company's carbon black is used in all-steel radial tires, and the types of carbon black used in different tire types are also slightly different. The gross margin of the all-steel meridian carbon black produced by the company is relatively high, and the company has also done a good job in power generation and recycling of self-produced packaging, etc., so that the company's overall gross margin has always been 7-9 percentage points higher than the industry average. Currently, the tire market is growing at an average rate of about 15%, and the proportion of radial tires is still increasing. The use of carbon black for all-steel radial tires has not been developed in China for a long time, and there are very few companies that can produce this kind of product. Supply will continue to be in short supply for the next 3-5 years. The company's fund-raising project reached a post-production capacity of 320,000 tons of carbon black and 42 megawatts of power generation capacity, greatly improving the company's profitability. The company's issue price is 12.5 yuan, which corresponds to a dynamic price-earnings ratio of 24 times after dilution, but since the IPO began on June 23, the stock price of Black Cat shares, which is most comparable to the company, has dropped sharply by 20%. Currently, the dynamic price-earnings ratio is only 21 times. However, considering the high gross profit margin and ROE level of Longxing Chemical, which gave the company a price-earnings ratio of 22-28 times, based on our expected performance of 0.53 yuan in 2010, the stock price is quite reasonable in the 11.6-14.8 yuan range.