The company is a leading enterprise in the PVC additives industry. The company mainly provides PVC additives sales, personalized pre-sales ingredient program services and after-sales technical services for the PVC industry. The main products include processing additives, ACR impact modifiers, MBS impact modifiers, etc., and is a leading enterprise in the domestic PVC processing additives industry. The company's products are widely used in PVC building materials, packaging materials, automobiles and other means of transportation and daily necessities. The company's product quality is ahead of the industry, benefiting from product structure optimization, and gross margin is higher than the industry average; with MBS increasing production capacity and putting into operation, performance has steadily improved. The company plans to enter the field of new resin materials using epitaxial methods, and the prospects are broad. While ensuring the stability of its main business, the company expands and strengthens the materials industry through a combination of endogenous growth and epitaxial expansion. The company recently announced that it plans to acquire 99.88% of Jiangsu Heshili's shares by issuing shares and paying cash to enter the field of synthetic resins. Based on PBT fiber and PBT resin products, Heshili focuses on the product direction of PBAT and TPEE resins, their modified products, and PBT fiber products, and a three-tier hierarchical structure layout with TPEE resin application development as the future product direction. Heshili promised net profit of no less than 50, 65, and 78 million yuan respectively for 2016-2018, with a total net profit of 193 million yuan during the commitment period. TPEE products and PBAT products have broken foreign technology monopolies. According to company data, Heshili has broken foreign technology monopolies on TPEE and PBAT products, has a core competitive advantage, and has broad market space. TPEE is widely used in automotive core components, medical and health equipment, wires and cables, and rail transit; PBAT is used in packaging materials, agricultural film, etc., and is the best solution for white pollution. Currently, both products are monopolized by Chinese enterprises, and will gradually be domesticated in the future. Net profit for 16-18 is expected to be 4036, 5420, and 66.15 million yuan respectively, maintaining the “increased holdings” rating. The company's EPS for 16-18 is expected to be 0.20, 0.26, and 0.32 yuan (not yet considering additional dilution and timely profit contributions), taking into account the company's business development, and maintaining a “prudent increase in holdings” rating. Risk warning: 1. Raw material prices fluctuate greatly; 2. Demand falls short of expectations due to macroeconomics falling far short of expectations; 3. The progress of increasing production falls short of expectations.