The company released its three-quarter report. The first three quarters achieved revenue of 1.14 billion yuan, a year-on-year growth rate of -3.5%, net profit attributable to the parent company of 58 million yuan, a year-on-year growth rate of -32.1%, and an EPS of 0.08 yuan. The company announced plans for the non-public offering of shares. It plans to issue no more than 707.37 million shares, no less than 7.31 yuan/share, raise no more than 510 million yuan, invest in new three-dimensional free-form environmentally friendly packaging construction projects and microstructured optical packaging materials construction projects, and supplementary working capital. Fluctuations in Chinese tobacco inventories have led to a decline in performance, and the growth rate is expected to pick up in the second half of the year: As an upstream in the tobacco label industry, the revenue growth rate declined slightly due to the impact of China Tobacco's inventory removal in the first half of the year. Considering that the impact of China Tobacco's inventory removal has basically been eliminated and the traditional peak season in the fourth quarter, we expect the growth rate to pick up in the fourth quarter. The sharp increase in management expenses was the main reason for the decline in performance: management expenses in the first three quarters were 186 million yuan, up 29.5% year on year. As a result, the management expense ratio rose from 12.2% in the same period last year to 16.3% in the first three quarters. Judging from the semi-annual report split, the relatively rapid increase in wages, benefits, etc. expenses related to employee costs was the main factor in the increase in management expenses. We judge that this is related to the company's active development of new business. It is expected that in the future, as the new business progresses smoothly, the management expense rate will decline. Explore new projects around the advantages of the main business to form a driving force for growth: The current fixed increase project mainly revolves around the main business, but the project itself has no shortage of highlights. We judge that the risks of the fixed increase project are manageable, the profit certainty is strong, and the new project has improved in terms of environmental protection, anti-counterfeiting, and appearance. Against the backdrop of slowing growth in the tobacco industry, it is conducive to enhancing the company's competitiveness and new growth points. Maintain the “Overweight” rating. The company's main business is growing steadily, and the company is actively experimenting with business transformation to seek growth drivers. We are optimistic about the company's future growth space. Based on the latest financial data, without considering the dilution impact brought about by this fixed increase, we downgraded the 16-17 EPS by 0.15 yuan and 0.19 yuan, corresponding to PE 56 times and 44 times, maintaining the “increase in holdings” rating. Risk warning: Company transformation falls short of expectations