The company is one of the largest domestic polyacrylamide suppliers and the second largest manufacturer of polyacrylamide for oil production in China. The company is mainly engaged in the development and production of acrylamide, polyacrylamide (PAM) and their derivatives. The main application areas of the products are tertiary oil production, water treatment, papermaking, mineral processing, etc. From 2007 to 2010, the company's operating conditions were good, operating income remained stable, net profit showed a steady growth trend, and gross sales margin and net profit margin rose steadily. China is the world's largest producer and seller of polyacrylamide. The upstream of the polyacrylamide industry is the petroleum refining industry, and the downstream is oil extraction, water treatment, paper and other industries. China is the world's largest producer and seller of polyacrylamide, accounting for 41% of global production and 38% of total sales. The international polyacrylamide industry is highly concentrated, with major manufacturers accounting for more than 50% of the global market share. The concentration of the domestic polyacrylamide industry is also high. The sum of the production capacity of the top five manufacturers accounts for about 54% of the country's production capacity. The production capacity of oilfield products has been expanded, and the dominant position has been further strengthened. The large-scale promotion of tertiary oil production is driving demand for oilfield products. The share of the company's PAM products for oil production in Shengli Oilfield is expected to rise to around 60%. The expansion of the Dagang Oilfield will also bring additional sales, and the revenue of PAM products for oil production is expected to rise steadily. The market demand for surfactants used in oil removal is huge. At the end of 2011, the company's production capacity was expanded to 105,000 tons/year, which will become a new profit growth point for the company. Actively expand the field of water treatment and build the next vital force for revenue generation. Demand for PAM in the domestic water treatment sector is increasing day by day. The performance of the company's cationic PAM products is in a leading position in China, and the sales situation is good. After the production capacity is expanded to 12,000 tons/year at the end of 2011, sales volume will rise rapidly, and gross margin is expected to remain at a high level. The company's water treatment PAM, especially cationic PAM, will become the company's next revenue generator. The company's competitive advantage is obvious. The company has obvious advantages in various aspects such as production scale, product quality, R&D strength, and geographical location. Profit forecasts and investment advice. We believe that the company's performance growth in 2011-2013 is quite certain. It is estimated that the earnings per share for 2011/2012/2013 will be 0.52/0.79/1.05 yuan, respectively, and the corresponding price-earnings ratio will be 31/21/15 times, respectively, giving it an “increase in holdings” rating for the first time.