Investment points: leading enterprises in the nylon industry, focusing on high-end and differentiated nylon filaments. Huading Co., Ltd. is a high-tech enterprise specializing in the R&D, production and sales of high-quality, differentiated civilian nylon filament. It has an annual production capacity of 132,000 tons of civilian nylon filament. It mainly produces four categories of civilian nylon filament products with high weaving stability and dyeing uniformity: POY, HOY, FDY and DTY. The product range covers all specifications of 9dtex-444dtex. The company has independently developed a series of more than 30 types of differentiated and functional civilian nylon filaments, including ultra-bright, ultra-low density, ultra-thick, matte, porous, hollow, flat, moisture-absorbing, anti-bacterial and deodorizing. The product differentiation rate is close to 60%, and it is in a leading position among enterprises in the same industry. The products are mainly used in high-end fields of civil textiles such as sports and leisure apparel, swimsuits, down jackets, seamless underwear, lace, suits, shirts, T-shirts, high fashion fabrics, and high-end socks. The nylon industry is at a low point. Consolidate and expand differentiated nylon filaments, and wait for the industry to recover. In September 2015, the company's non-public offering raised 1 billion yuan to invest in the construction of a “differentiated nylon filament project with an annual output of 150,000 tons”. The final sales products of the project are 80,000 tons of FDY, 50,000 tons of DTY, and 20,000 tons of ATY per year. The construction investment for this project is not simply to expand recycled production, but rather the company's strategic measures to upgrade product grades, optimize production processes, and enrich product types. It can increase the added value of products and guide the upgrading of industrial consumption. Some products will fill the domestic gap, thus enabling the company to better meet the diversified needs of customers and enhance market competitiveness. Invest in the environmental protection industry to achieve diversified development. In 2015, the company adjusted its industrial layout, disposed of Hangzhou Hangding Nylon Technology Co., Ltd., and invested in the environmental protection industry. On June 10, 2015, the board of directors of the company deliberated and approved a proposed investment of 102 million yuan to acquire 51% of the shares of Beijing Global Zhongke Water Technology Co., Ltd., and a strategic cooperation agreement was signed; on December 16, 2015, the board of directors of the company deliberated and approved, with an investment of 80.14 million yuan to acquire 51% of the shares of Jiangsu Unilian Environmental Development Co., Ltd. The above investment enabled the company to have business capabilities in the design, construction and operation of municipal water supply and drainage projects, integration of automated information systems, sewage treatment, sludge treatment, etc., and has advanced water treatment technologies such as high-efficiency chemicals, ultrafiltration membranes, cloud water, and deep-bed filters. It has initially formed a new environmentally friendly water treatment business sector other than nylon, expanded the company's business field, and taken firm steps in implementing diversified strategic goals. Implement employee shareholding and have full confidence in the future development of the company. In order to improve the cohesion of employees and the competitiveness of the company, achieve the unity of interests of shareholders, the company and employees, fully mobilize the enthusiasm and creativity of employees, and achieve the sustainable development of the company, the company has implemented an employee stock ownership plan. As of April 13, 2016, the company has purchased a total of 14.1965 million shares through asset management plans, with an average transaction price of 10.68 yuan/share. Profit forecasts and investment advice. Since the 150,000-ton differentiated nylon filament project is still under construction, without considering its future performance contribution for the time being, we expect the company's net profit attributable to the parent company in 2016-2018 to be 46.36 million yuan, 54.37 million yuan, and 68.13 million yuan, respectively, up -53.75%, 17.28%, and 25.31%; corresponding EPS is 0.06 yuan, 0.07 yuan, and 0.08 yuan respectively. Since the prosperity of the company's industry is still sluggish, there is no rating for the first time coverage yet. Risk warning. The risk of large fluctuations in crude oil prices; the risk of a decline in demand in the downstream textile industry for nylon.