Report guide: In 2013, the company's traditional home appliance composite materials business gradually broke out of a slump. After the acquisition of Kim Young-ma's shares is completed, it will gradually transform into a diversified company with a dual main business of home appliances and media. Key investment points The growth rate of net profit is in line with expectations. In 2013, the company achieved sales revenue of 1,090 million yuan, a year-on-year decrease of 4.99%, operating profit of 31.912 million yuan, a year-on-year increase of 29.52%, and net profit attributable to owners of the parent company of 30.08 million yuan, a year-on-year increase of 21%, and earnings per share of 0.14 million yuan; in the fourth quarter, the company achieved operating income of 295 million yuan, a year-on-year increase of 10.03%, net profit of 144,200 yuan, and a loss of 2006 million yuan in the same period in 2012. The downstream refrigerator industry is weak, and demand for household appliance panels is weak. In 2013, China's refrigerator production was 76.64 million units, up 2% year on year, and washing machine production was 57.02 million units, up 2.2% year on year. Due to weak downstream demand for refrigerators and washing machines, the company's annual panel material sales volume was 130,800 tons, up only 0.63% year on year. By product, the company's PCM board sales revenue was 979 million yuan, and VCM board revenue was 88 million yuan. Revenue fell 4.6% and 14.34%, respectively. In 2013, the average unit price of cold rolled sheets, the main raw material fell 3.1% year on year. In 2013, the company voluntarily abandoned some orders with lower profit margins, which led to a 3.56 percentage point and 9.12 percentage point increase in gross margin of PCM and VCM boards, respectively, and comprehensive gross margin increased by 3.57 percentage points. In the future, it will become a dual main business company for home appliance composites and film and television media. Currently, in addition to being based in the field of traditional home appliance composite materials, the company will gradually develop new products such as SUSLIKE, which are mainly used to replace stainless steel sheets for home appliances, which have a high cost performance ratio. On the other hand, it will gradually use existing products to advance into decoration materials. The company will use 220 million yuan in cash to acquire 26.5% of the shares of Jin Yingma Film and Television Culture Co., Ltd. held by Tengzhan. Jin Yingma's net profit margin and return on net assets both exceed 20%, which is more profitable than the company's current main business. It is expected that after the company acquires 26.5% of the shares in the first step, it will further increase Kim Young-ma's shareholding ratio and finally achieve shareholding. After the acquisition is completed, the company will transform into a dual business of home appliance composite materials and film and television media, and the film and television business will add new growth impetus to the company. The profit forecast and valuation estimate that the company's EPS for the next two years will be 0.23 yuan and 0.33 yuan respectively, and the corresponding dynamic price-earnings ratios will be 45.48 times and 32.15 times, respectively, maintaining the company's “increased holdings” investment rating.