Guide to this report: The company is expected to usher in a favorable situation where the volume and price of structural foam materials have risen sharply in 2014. It is expected that post-processed products will maintain a rapid growth rate of more than 60% in 2014, covering the first time and being given an “increase in holdings” rating. Investment points: For the first time, coverage was given a “increase in holdings” rating, with a target price of 10.45 yuan. The company's 2014/2015/2016 EPS is expected to be 0.19/0.28/0.34 yuan respectively, with growth rates as high as 183%, 50%, and 21%, respectively. Considering the company's rapid long-term growth and increased certainty after speeding up the deployment of the track sector, at the same time, PMI structural foam materials have broad prospects for military and civilian use. Referring to the average PE of comparable companies, we gave the company 55 times PE in 2014, with a target price of 10.45 yuan, and for the first time, a “increase in holdings” rating. Structural foam materials are expected to rise sharply in volume and price in 2014. Affected by the recovery of wind power and the acceleration of rail transit market development, the operating rate and sales volume of structural foam materials will increase dramatically in 2014. The increased profitability of wind power equipment companies has left room for the company to raise prices, and the industry's current low profit and oligopolistic competitive pattern may contribute to an increase in the price of the structural bubble. The sales volume and price of structural foam materials increased by 10%, increasing the 2014 EPS by 0.02 yuan and 0.04 yuan respectively. The company is speeding up its layout in the field of rail transit, and future growth can be expected. Currently, Xinguang Environmental's unfulfilled orders amount to 157 million yuan, and the promised performance for the next three years has a compound growth rate of 76% over the next three years. We believe that the acquisition of Xinguang Environmental Protection is an important sign that the company is speeding up the layout of the rail transit sector, and that the company's strategy of leaning its main business towards the rail transit sector is becoming increasingly clear. The high growth rate of post-processing will continue for a long time. The market is worried that the high growth in post-processing in 2013 will only be short-lived, and that subsequent growth will be weak. In fact, the company's centralized production line in the post-processing field was completed in 2013 and 2014. The target market target customers for these products already have ready-made business channels and will be rapidly introduced. It is expected that the company's post-processing business revenue will continue to grow by more than 60% in 2014. Stock price catalytic factors: the price of structural foam materials has risen; the company's market development in the rail transit sector has accelerated; the company's military related product certification has been completed. Risk warning: The development of the rail transit market fell short of expectations; the gross margin of post-processed products declined.