Raw Lead's performance exceeded expectations, with actual profits exceeding 100 million yuan in 2015. The company announced that it is expected to achieve net profit attributable to shareholders of listed companies of 10 million yuan to 15 million yuan for the full year of 2015. From January to September 2015, the company lost 41.64 million yuan. Based on this calculation, the company's profit for the fourth quarter exceeded 51 million yuan, which greatly exceeded market expectations. The RMB depreciated 6% in 2015, and the company's semi-annual foreign currency debt was about 300 million US dollars. Based on this calculation, the annual exchange loss was over 100 million. If the impact of one-time exchange gains and losses is not taken into account, the company's net profit is expected to exceed 100 million in 2015, an increase of more than 300% over the previous year. Supply-side reforms helped processing fees rise. In 2015, the government's environmental protection enforcement was completely upgraded, leading to a sharp contraction in the supply of illegally recycled lead; low lead prices during the same period caused downstream small and medium-sized lead smelting production capacity to be shut down, and upstream mining companies had large stocks of lead concentrates (especially low grade), leading to a reversal in upstream and downstream supply and demand relationships, and a sharp rise in smelting and processing costs. Lead processing fees increased from 1,700 yuan/ton to 2,700 yuan/ton in 2015. With the deepening of supply-side reforms, we expect processing fees to run at a high level for 12-18 months, and there is still room for growth. Processing fees rose again to 2,900 yuan/ton in January 2016. Currently, the total cost of the company's lead smelting is about 1,900 yuan/ton, and the smelting production capacity is 400,000 tons. Based on this calculation, the company's lead smelting will achieve a profit of about 400 million yuan in 2016, and a significant increase in performance is a foregone conclusion. Seize pioneering distribution channels, and the prospects for recycled lead are bright. In the next 3 years, a large number of small and medium-sized recycled lead enterprises in China will be eliminated due to environmental issues, and the number of enterprises is expected to be reduced from 200 to less than 10. The company, as an industry leader, will benefit from this. Recycling channels are the core competitiveness of renewable resource enterprises. The company has decided to invest in the construction of a “waste lead-acid battery recycling network system” covering 6 provinces to establish a national waste lead-acid battery recycling network. The recycling volume is expected to reach 720,000 tons. In the future, China's recycled lead corresponds to a profitable market size of 5 to 6 billion yuan. The company is expected to gain more than 20% market share through technology and channel advantages, and the profit prospects are bright. The “buy” rating takes into account the largest share capital dilution (fixed increase completed in '16). We raised the company's 15-17 EPS to 0.04 yuan, 0.79 yuan, and 1.06 yuan (original value: -0.23 yuan, 0.41 yuan, 0.85 yuan). As the profitability of the company's raw lead has been reversed, a sharp increase in performance in 2016 is a foregone conclusion, and the prospects for the recycled lead business are bright. The reasonable value we previously gave was 20.50 yuan, which is 26 times PE for 16 years, giving it a “buy” rating. The risk suggests that lead smelting and processing costs are falling, and the implementation of environmental protection policies for recycled lead is less than expected.