Company introduction: Pioneer New Materials is a leader in the polymer composite sunshade fabric industry. It is positioned in the high-end market, and its products and technology are at the leading international level. The company purchased imported high-end equipment and carried out modifications, comprehensively improved product quality and production efficiency, and created certain industry barriers. Currently, the sales price of the company's products is only 30%-50% of the international sales price, and the gross margin level is as high as 40%. It has a clear competitive advantage, and the product supply is in short supply. In the future, the company will continue to develop new products, and with the introduction of new high-margin products, the average gross margin level of the company will also rise. The demand for energy saving and consumption reduction in buildings continues to rise, and the demand for polymer shading materials is also constantly expanding. Compared with the original ordinary roller shutter fabric, polymer shading materials have characteristics such as heat resistance, flame retardancy, insulation, antibacterial, and non-perishable, and the market prospects are broad. The company will benefit from the rapid growth of this market. The future growth of the company will mainly come from the following four aspects: (1) increase the production capacity of solar materials; (2) increase in adhesion/coating production capacity (production capacity of solar materials purchased from outside glass fiber substrates); (3) increase the production capacity of PVDF film materials; and (4) increase the production capacity of vacuum aluminized film. Investment highlights: 1. Targets related to energy saving and emission reduction topics; 2. Production capacity expansion may accelerate, and new product launch progress exceeds expectations (such as PVDF film, PTFE film, vacuum aluminizing film, etc.); 3. The domestic market is growing rapidly, and domestic and export sales are progressing hand in hand; 4. New orders have exceeded expectations. Risks: 1. The risk that production capacity will expand less than expected; 2. The cost rise is too fast and cannot be transmitted downstream in a timely manner; 3. RMB appreciation; 4. Demand in overseas markets shrinks sharply. Valuation and recommendations: The number of shares issued by the company on the public market is 20 million shares, accounting for 25.32% of the total share capital after issuance, and 79 million shares after issuance. We expect the company's diluted EPS from 2010 to 2012 to be 0.35,0.71 1,1.20 yuan, respectively, and the recommended inquiry range is 21 to 25 yuan, and the corresponding 2011 PE is 30 to 35 times.