Sales of sunshine fabrics are smooth, and performance growth is all based on increased production capacity. The company's main product, high-end shading fabrics, are emerging materials in line with national strategic development. They have a double-effect energy saving effect, can block more than 65% of heat radiation and more than 95% of ultraviolet rays, can reduce the electricity consumption of air conditioners in summer, and maintain indoor temperature in winter. As foreign markets are more mature, sunshade fabrics are in high demand abroad. In the future, with the improvement of energy efficiency standards for buildings in China, shading fabrics will face huge development opportunities. The company's products are in short supply, but since they are currently mainly sold through intermediary distributors, the price of the products is lower than that of similar products abroad. The gross margin of the company's products declined slightly in the first half of the year due to the increase in raw material prices and the increase in labor costs; in the second half of the year, with the price increase of the company's products, the gross margin will gradually return to the level of previous years. On the basis that gross margin remains stable, the company's performance growth mainly depends on increased production capacity. It is estimated that by the end of 2012, the 6 million square meter sunshine fabric production line raised by the company will reach production, and the production capacity of sunshine fabric will reach 12.5 million square meters at that time. Foam coating products were put into production in 2012, and the company, which has broad scope for development of PTFE membranes, invested 55 million yuan to establish Jiaxing Pioneer Coating Materials Co., Ltd. in Jiaxing City to produce foam coated shading fabrics. After the project is fully completed, the annual net profit will exceed 10 million yuan. PTFE membrane is an emerging building material with excellent performance and is widely used in construction, petrochemical, medical and electronic appliances fields. There are still few enterprises in China that can produce this new material. Currently, they mainly rely on imports. If the company's PTFE film pilot production line is successful, the company will expand production as soon as possible, and it will take the lead in the PTFE film market. As a performance forecast, we gave Pioneer New Materials Company an EPS of 0.46 yuan and 0.80 yuan respectively, corresponding to 2011 and 2012 PE of 44.28 times and 25.46 times, respectively. The performance growth rate of the medium to short term company was limited by the progress of production capacity investment, and the growth rate slowed down; in the long run, in the context of energy saving and emission reduction, the company, as a leading enterprise in the shading industry, is expected to enjoy policy dividends, giving Pioneer New Materials a “recommendation” rating for the first time. Risk warning (1) Fund-raising projects are progressing less than expected; (2) raw material prices have risen sharply.