The performance is consistent with the forecast. In 2015, Dongfang Tantalum achieved operating income of 1.08 billion yuan, a year-on-year ratio of -56%, net profit attributable to the parent company of -640 million yuan, equivalent to earnings per share of -1.45 yuan, loss increased by 89% year-on-year, and the performance was consistent with the forecast. Comment: 1) Prices of tantalum powder and tantalum wire have declined, and product prices have declined; market competition has intensified, and foreign market share has declined. 2) Sales volume fell 51.7% year on year to 17,000 tons. 3) The full-year gross margin fell 13.4ppt to -12% year on year, mainly because losses in new industries, especially in the titanium sector, seriously dragged down overall profits. 4) Asset impairment losses increased by 230 million yuan over the same period last year (inventory loss increased 130 million yuan), affecting EPS by 0.5 yuan. 5) The management fee rate increased by 7ppt to 13.3%. The development trend is based on the transformation and upgrading of traditional products. Despite the continued downturn in the tantalum-niobium market, the company's tantalum-niobium products still contributed 60% of the annual revenue, and gross margin increased by 1.7ppt to 7.3%. It is currently the company's only product with positive gross profit. The high-tech industry of niobium and niobium-based materials built by the company through allotment of shares achieved benefits of 8.82 million yuan in the current period. The profit of the new industry fell short of expectations, and the titanium sector continued to lose money. The company lost 83.377 million yuan in titanium and titanium alloys, mainly due to intense competition in the civilian titanium market, high entry threshold for military products, and limited sales. The company currently has a large proportion of ingots and plate products in titanium processing materials. The product structure is unreasonable, and there is no effective support for operations. It is difficult to improve profits, and there is a certain risk of delisting. The company has lost money for two consecutive years in 2014 and 15. If it fails to reverse losses in 2016, the listing will be suspended. Currently, the company is actively planning major asset restructuring to absorb new industries and improve profits. However, there is still uncertainty about the specific implementation rules and progress, while the downstream of major products is still weak, making it difficult to improve profits. The profit forecast was adjusted and lowered the 2016 profit forecast of 1.02 yuan to -0.80 yuan, and the 2017 profit forecast was introduced to -0.72 yuan to reflect the sharp decline in performance. Valuation and recommendations Demand in the tantalum-niobium industry has shrunk, and there is a lot of pressure on the company to improve profits. The target price was lowered by 26% to $10 (for 5.6x 2017e P/B). Maintain a neutral rating. The profit of the new venture industry fell short of expectations; the price of tantalum and niobium continued to decline.