1. The incident company released its 2011 annual report, achieving total operating income of 1,523 billion yuan, a year-on-year increase of 18.45%, operating profit of 67 million yuan, total profit of 68 million yuan, and net profit attributable to shareholders of listed companies of 59 million yuan, year-on-year changes of -1.35%, 0.66%, and 1.89%, respectively. EPS is 0.73 yuan (based on the share capital before issuance), and it should be 0.54 yuan based on the share capital after issuance. 2. Our analysis and judgment 1. Performance is in line with expectations. The increase in revenue from board export sales, the company's performance is fully in line with our previous expectations, and net profit is basically the same as the previous year; the company's share of board export sales increased during the reporting period, causing the increase in operating income to exceed expectations, but this is only a change in the way the board is sold, and it has not led to an actual increase in performance. Looking at the gross margin for the whole year, the gross margin in 2011 was 9.7%, lower than the level of 10.6% in 2010. Among them, the gross margin of all types of coated boards declined slightly except for ordinary boards. The report pointed out that the decline in gross margin was due to rising raw material procurement prices. We believe that the gross profit per ton of the company's products has remained stable, and that the increase in steel prices has led to a dilution of the gross margin. 2. Looking at improvements in gross margin in the short term, the release of production capacity by adding high-end varieties, since production capacity for fund-raising projects will not be released in 2012, it is expected that equipment will run in the first half of 2013 and 20% will be released in the second half of the year. Significant release will have to wait until 2014 and 2015. Therefore, for 2012, we believe that the increase in performance comes mainly from two sources: First, the release of production capacity for high-end varieties will become a new increase in performance. The price of the self-cleaning board BHP factory in China is 14,000 to 24,000 yuan. The company initially expects the sales price to be around 13,000 yuan to open up the market, and the production cost is less than 9,000 yuan. The higher tonnage margin of this variety will be the main increase in 2012 performance. Its price and sales volume will be the focus of our tracking. Second, gross margin has rebounded. According to our forecast of steel prices for the whole year, steel prices are expected to fall slightly this year. This trend is conducive to improving gross profit margins; furthermore, the adjustment of product structure is also one of the benefits. This is also the direction of adjustment emphasized over and over again by the company's management. The decline in low-end products such as ordinary boards, and the growth of antistatic boards and self-cleaning boards (especially the latter) will lead to an increase in gross profit. 3. Investment recommendations Considering that the company's short-term increase in production capacity is limited and high-end varieties currently account for relatively small amounts, we predict that 2012-2014 EPS will be 0.62 yuan, 0.82 yuan, and 1.08 yuan, giving a careful recommendation rating.