The Chuzhou project is about to be ignited, and the performance growth in the second half of the year is more dynamic: the Chuzhou crystal wine cup project will be ignited in early June, the commissioning is expected to be completed by the end of June, and the products will be sold off the line in mid-late July. The company's 35000-ton fund-raising project has been put into production for more than one year. With this project, the company has established a learning curve for the production and sales of medium-and high-grade glassware. The time from completion to profit contribution of the Chuzhou project is expected to be much shorter than that of the 35000-ton project.

The ex-factory price of only wine glasses for the project will be 9-10 yuan, with a gross profit margin of about 45%. With the commissioning of the Chuzhou project in the second half of the year, the company's performance growth will be more sufficient.

Enter the supermarket system to complete the manufacturing turn to the brand:

In March this year, the company's products officially entered the Shang Chao channel and opened the direct marketing mode. The company sold the products to Shanghai Shige, a wholly owned subsidiary, at the ex-factory price, and then sold the products to Shang Chao channel at about 2.5 times the ex-factory price. At present, the company has signed supply agreements with Carrefour, Metro, Datun Fat, Tesco, Hualian, China Resources, Agriculture, Industry, Commerce and Industry, and is expected to complete the supply contract with Walmart Inc in June and supply in July.

Through our calculations, it is expected that the Shang Chao channel is expected to achieve sales of about 50 million this year, and the gross profit margin is expected to be about 60%. We believe that entering the super system not only enables the company to enter a previously completely blank market, but also means that it is transforming to brand consumption.

The national fight against corruption and advocating famous brands are good for the company:

The new government came to power to crack down on corruption, which affected the domestic high-end catering industry under a lot of pressure, many high-end hotels have quietly transformed to mid-range catering. As the high-end catering industry mainly uses glassware from the top European brands (mostly handmade in Italy, Czech and Germany, with a price of more than 50 yuan per piece), therefore, the transformation of the high-end catering industry to mid-range catering is good for the company's current foray into the medium-and high-grade glassware market.

From the clothing worn by the president and his wife on overseas visits and the adoption of domestic brands in official vehicles, we can see that the country will vigorously support and carry forward national brands in the future. Domestic medium and high-grade glassware is currently in the stage of absolute monopoly by overseas brands. the company is the only famous brand enterprise marching into the medium and high-grade glassware industry, and it is expected to benefit from the enhancement of national brand preference in the future.

Deep ploughing channels, layout and urbanization:

Urbanization is an important focus of domestic future development. The rapid development of small and medium-sized cities will bring the relocation of industries and people, followed by the rise of catering and hotel industry in small and medium-sized cities, and the glassware industry will benefit from the development of urbanization. The company used to hold dealer order meetings at our headquarters, which are generally attended by provincial agents. In order to better layout urbanization, the company will order dealers to open in different provinces this year, which will help prefectural and county-level dealers in each province to participate in the meeting.

Is about to enter the second high growth period, upgrade the rating to "buy": we expect the company's EPS to be 0.48yuan and 0.73yuan in 2013-2014, the current valuation of the small and medium-sized board is 24 times, although the company's current valuation is on the high side, considering that it has been transformed from a manufacturing enterprise into a brand consumer goods, and after the Chuzhou project is put into production, the company will enter the second high-speed growth period, we give it a 12-month target price of 20 yuan. Upgrade the rating to "buy".