A strategic emerging enterprise in the field of new petrochemical materials. The company was founded in 1993. After adjustment and transformation, it currently mainly uses clean and lightweight propane and carbon 4 as raw materials to produce products such as propylene, isooctane, and methethyl ketone, while also operating the storage, wholesale and retail of gasoline, diesel, and liquefied gas, forming a development pattern of new petrochemicals and refined oil storage and logistics as the main business. The PDH spread was high in the fourth quarter. The price difference of propylene-1.2* propane in the fourth quarter of 2016 was 380 US dollars/ton, an increase of 435% over the previous year, and the price spread remains high. The company has PDH rights and a production capacity of 300,000 tons, which directly benefits when the price difference is high. Since 2017, oil products nationwide have been upgraded to the national V standard. On February 17, 2016, 11 ministries and commissions including the National Development and Reform Commission jointly issued the “Notice on Further Promoting the Quality Upgrading of Refined Oil Products and Strengthening Market Management” (NDRC [2016] No. 349). In order to speed up the quality upgrade of refined oil products, the notice stipulates that from January 1, 2016, 11 provinces and cities in the eastern region will fully supply national V standard automotive gasoline and diesel; from January 1, 2017, the country will fully supply gasoline and diesel for vehicles that meet national V standards, and at the same time stop domestic sales of automobile gasoline and diesel that are lower than the national V standard. The oil upgrade is driving the increase in demand for isooctane. The most important part of the gasoline quality upgrade is the reduction in sulfur content. Lowering the sulphur content in gasoline can reduce emissions of volatile organic matter (VOC), CO, and NOx in exhaust gases. As China's oil emission standards are raised, the sulfur content in automobile exhaust will continue to decline, thereby helping to reduce air pollution. From the national four standard for gasoline to the national five standard, the limit on sulfur content in gasoline was reduced from no more than 50 ppm to no more than 10 ppm. However, the process of reducing the sulfur content of gasoline will cause serious octane loss. As a high-octane gasoline additive, downstream demand for isooctane will benefit from oil upgrades. The price of isooctane has continued to rise since 2017. As oil prices rebounded, the price of isooctane rose 10.2% for the full year of 2016. Since 2017, the price of isooctane has continued to rise. Up to now, it has risen 5.9%, and the price spread has increased by 12.5% (currently the price of isooctane is 5,400 yuan/ton, the price difference is 900 yuan/ton). Benefit from oil upgrades. The company's propylene, isooctane, methylethanone and other products are produced and operated by Ningbo Haiyue New Materials Co., Ltd., a holding subsidiary. The first phase of the company's 1.38 million ton propane and mixed carbon four utilization project was officially put into operation in 2015. It has a propane dehydrogenation unit with an annual output of 600,000 tons, an isooctane unit, and a 40,000 ton methylethanone unit, which directly benefited the company during the oil upgrade process. Profit forecasts and investment ratings. We expect the company's EPS from 2016 to 2018 to be 0.06, 0.17, and 0.22 yuan, respectively. The company's BPS is expected to be 3.55 yuan in 2016. According to this BPS and 4.5 times PB, we gave the company a target price of 15.98 yuan, giving the company an investment rating of “increased holdings” for the first time. Risk warning: The risk of large fluctuations in product prices.