There was a month-on-month improvement in performance: in the first quarter, the company achieved operating income of 29.97 million yuan, a year-on-year decline of 2.93%, and the company achieved net profit attributable to the parent company of 5.62 million yuan, equivalent to an EPS of 0.04 yuan, a year-on-year decline of 29.16%. Affected by the domestic economic situation, the decline in silicone rubber market demand in the first quarter of 2013 had a great impact on the silica used in silicone rubber produced by the company, so the production and sales situation during the reporting period did not meet expectations, and the performance was affected. Thankfully, in the first quarter of this year, net profit increased by 58.31% compared to the fourth quarter of last year. The gross profit margin and net profit margin for the first quarter also increased by 1.02 and 9.54 percentage points month-on-month, respectively. It is expected that the improvement in performance in the next quarter will continue: due to poor demand in 2012, the operating rate of the two newly built projects of the company was not high; the 20,000 ton fundraising project achieved a net profit of only 10.45 million yuan throughout the year, and the 30,000 ton overfunded project achieved a net profit of only 650,000 yuan throughout the year. In the first quarter of this year, the company's 20,000 ton fundraising project achieved a net profit of 4.3 million yuan, more than 40% of the project's net profit for the full year of last year; the 30,000 ton overfunded project achieved a net profit of only 650,000 yuan throughout the year, which is the same as the net profit of the project for the whole year of last year. It is expected that as the company strengthens sales channels and expands, the load on fundraising projects and overfunded projects will gradually increase. The domestic green tire labeling law is about to be introduced: China's green tire labeling law will basically refer to the EU labeling law system. By the end of 2013, China will also introduce relevant labeling standards and regulations after the European Union, Japan, South Korea, and the United States, and will accelerate the upgrading of self-regulatory standards for the green tire industry to industry standards and national standards. It is expected that by 2017, China will begin implementing the mandatory green tire classification label law. Among them, in the non-mandatory grading stage, 50% of tire companies seeking to achieve green tire production capacity by 2015, and of these, no less than 50% of the production capacity is green tires, that is, 25% of the total production capacity will be green tires. Preliminary estimates suggest that this will drive more than 300,000 tons of new demand for highly dispersed white carbon black. Investment advice: increase holdings - A investment rating, target price of 8 yuan for 6 months. We expect the company's revenue growth rates from 2013 to 2015 to be 16.5%, 30%, and 30%, respectively, net profit growth rates of 24.8%, 31.4%, and 30.4%, respectively, increase holdings - A investment rating, and a target price of 8 yuan for 6 months, which is equivalent to a dynamic price-earnings ratio of 28 times that of 2013. Risk warning: demand falls short of expectations