The Primitive Lead Dilemma Reversal Company is the world's largest electrolytic lead company. It has a production capacity of 400,000 tons of electrolytic lead, 5,000 kilograms of gold, and 1,000 tons of silver, and a comprehensive recycling of by-products such as crude copper, zinc oxide, and sulfuric acid. Affected by the slump in lead smelting and processing costs, the company's main product, in 2014, the operating income of electrolytic lead was 3,083 billion yuan, accounting for 36% of revenue, achieving gross profit of 2.38 million yuan. The gross profit ratio was only 6.12%, and the gross margin was only 0.75%. Since 2015, domestic lead smelting and processing fees have risen 1,000 yuan to 2,700 yuan/ton, but compared to overseas, they are still 10-20% lower, and there is still room for future price increases; benefiting from this, the company's EBIT profit margin increased 1.62 percentage points to 3.62% from the end of 2014, and profitability bottomed out and rebounded. Recycled lead has great potential. Environmental protection forces industrial integration. In 2014, China's recycled lead production was 1.6 million tons, up 6.7% year on year; refined lead production during the same period was 4.22 million tons, down 5.5% year on year. Currently, China's recycled lead accounts for about 38% of total lead production, and there is still plenty of room for improvement compared to the global average of 56% and the share of developed countries such as Europe, America, and Japan for more than 90%. With the implementation of environmental policies related to the recycled lead industry (industry entry, pollutant emission standards, etc.), it is expected that in the next 3-5 years, a large number of small and medium-sized enterprises will be eliminated, the number of enterprises is expected to be reduced from 200 to less than 10, and the concentration of the industry will increase dramatically, leading enterprises will benefit from this. Seizing channel opportunities and strategically positioning the “Internet +” recycling channel is the core competitiveness of renewable resource enterprises. The company plans to increase investment to build a “waste lead-acid battery recycling network system”, covering six provinces including Henan, Shaanxi, Shanxi, Sichuan, Jiangxi, and Fujian. It is estimated that the recycling volume will reach 720,000 tons; at the same time, the company will build an information network management platform for waste lead-acid batteries based on “Internet +”. Giving a “buy” rating to consider increasing the maximum diluted share capital, the company's 2015-2017 EPS is expected to be -0.23 yuan, 0.41 yuan, and 0.85 yuan. In the future, China's recycled lead will have a profitable market space of 5 to 6 billion yuan. The reversal of the company's performance in 2016 is highly certain, and it is expected to gain more than 20% of the market share of recycled lead in the long term; therefore, we gave the company 50 times PE in '16, corresponding to a reasonable value of 20.5 yuan, and gave it a “buy” rating. Risks suggest that the implementation of environmental policies for recycled lead is lower than expected; metal prices continue to fall sharply.