Main opinion 1. The price increase of disperse dyes and solvent dyes drove year-on-year growth in performance. Prices of disperse dyes, solvent dyes, and dye intermediates of major products rose 6.5%, 9.65%, and 8.52% respectively in the first quarter. The price of disperse filter cake fell slightly by 3.3%, and the prices of the rest of the products remained basically the same. Disperse dyes and filter cakes are still the main sources of revenue, contributing 288 million yuan and 99 million yuan respectively, accounting for about 60% of total revenue, followed by reduced dyes and filter cakes, accounting for 18% of total revenue; solvent dyes accounting for about 9% of revenue. Overall performance increased a lot month-on-month, mainly affected by rising product prices and seasonal factors. The 300,000 ton sulfuric acid project has already produced output, with sales volume of 13,000 tons in the first quarter, contributing 3.59 million yuan in revenue. 2. Prices of major raw materials rose, gross margin increased month-on-month, and management fees fell sharply Although product prices rose in the first quarter, major raw materials also rose a lot. Phthalic anhydride and phenol rose 36% and 22% year-on-year respectively. Overall gross margin increased by 2.2PCT year-on-year, slightly falling 2PCT to 49.4% month-on-month. The management fee rate was drastically reduced, down 2.4PCT to 10.23% year on year. It is expected that the concentration of all production management and some administrative management matters in the Lianyungang Chemical Park will greatly benefit the company's cost savings. 3. Investment suggestion: After 16 years of de-inventory, the dye industry gradually warmed up in the first quarter of this year. The company's main dispersive anthraquinone dyes are high-end products, and their profitability and stability are stronger than ordinary dyes. We expect the company to make a profit of 800 million yuan and 940 million yuan respectively in 18-19, corresponding to EPS of 1.4 and 1.63 respectively. The current stock price corresponds to PE12 and 11 times, maintaining the recommended rating. 4. Risk warning: Downstream printing and dyeing demand is poor.