Incident: The company issued an announcement. The new 3.4-meter polyolefin heat-shrinkable film production line project of the fund-raising project was put into operation ahead of schedule until the end of June 2013, and the second phase of the overfunded project of the new 3.4-meter polyolefin heat shrink film production line project was put into operation ahead of schedule until the end of December 2013. The company plans to invest in the construction of a high-barrier PVDC heat shrinkable film project with an annual output of 7,000 tons. Comment: POF heat shrink film production capacity was put into operation in advance. The company's original planned fund-raising project was put into operation at the end of 2013, and the overfunded project was put into operation at the end of August 2014. According to our tracking of the construction progress of the project, the overfunded project was put into operation a little earlier. The fund-raising project and the overfunded project will each contribute 9,000 tons of POF heat-shrinkable film production capacity to the company. Since the construction process of these new production lines is higher than the previous production line, it is possible to produce all of the company's existing products such as POF ordinary heat shrink film, POF cross-linked heat shrink film, and POF high-performance heat shrink film as needed, while helping to improve the yield of the company's products. The company that invests in the construction of 7,000 tons of high barrier PVDC heat shrink film has been doing research and development in the field of PVDC heat shrinkable film for many years. The company plans to invest 211 million yuan to build 6 high barrier PVDC heat shrink film production lines, with a total annual production capacity of 7,000 tons. The main core equipment of the production line will be independently developed by the company, and the construction period is expected to be 2 years. Currently, only a few companies, such as Sea-Yale in the US, can produce PVDC heat-shrinkable films. Production is limited, and prices have remained high. The company relies on technology accumulation in the POF heat shrink film field. If it can successfully start producing PVDC heat shrink film, it will enjoy the benefits brought by the PVDC market oligopoly. PVDC heat shrink film is the preferred packaging for chilled meat. PVDC film has a high oxygen and water vapor barrier rate, and can effectively extend the shelf life of food, etc. In countries such as the United States and Australia, PVDC heat-shrinkable film has a high penetration rate, and it has become the main form of packaging for beef and pork. At home, PVDC is used very little due to people's lack of awareness about chilled meat packaging. In the future, as people's living standards and awareness improve, demand for PVDC heat-shrinkable films will likely be released rapidly. Maintaining the “Highly Recommended” investment rating, we believe that the company has many advantages in scale, technology, customers, etc., and has strong market competitiveness. The commissioning of the fund-raising project will enable the company to become a leading global heat-shrinkable film company. The company's 13-15 EPS is expected to be 0.66 yuan, 1.02 yuan, and 1.34 yuan respectively. The corresponding dynamic PE is 26 times, 17 times, and 13 times, respectively, maintaining a “highly recommended” investment rating. Risk indicates that the cross-linked POF heat shrink film market promotion is lower than expected.