Incident: The company released its 2013 annual report. Revenue in 2013 was 167 million yuan, down 6.48% year on year; net profit attributable to shareholders of listed companies was 48 million yuan, down 24.07% year on year; EPS was 0.405 yuan, compared to 0.53 yuan last year. Regional competition intensified, and performance declined. The company's revenue declined in 2013, mainly due to increased competition in the chemical storage market. The increase in main operating costs led to a further decline in the company's net profit, mainly due to the increase in depreciation of the first phase of the Zhuhai Hengji Daxin Reservoir area project put into operation. The three fee values tend to be stable and fluctuate less. The chemical warehousing industry is highly homogenous, and the loss of orders in 2013 was the main reason for the decline in the company's performance. As in our previous analysis, the performance of chemical storage companies is determined by two key indicators: storage tank size and utilization rate. Until 13 years ago, the company's storage tank utilization rate remained around 90%, and it was actively preparing to invest in two fund-raising projects: the first phase of the Yangzhou Hengji Daxin Reservoir Area Expansion Project and the first phase of the Zhuhai Hengji Daxin Reservoir Area Phase III Project. Judging from the regional distribution of projects, competition for chemical warehousing in South China is intensifying, and the company is seeking breakthroughs in other markets. Henderson Daxin is a supporting chemical warehousing enterprise. Customers are highly concentrated in large-scale downstream petrochemical entities. A single customer structure can easily cause the company's order volume to fluctuate greatly. Currently, the petrochemical warehousing industry is mainly concentrated in the Yangtze River Delta and Pearl River Delta. According to the different sources of main revenue, petrochemical storage can also be divided as follows: one is a supporting warehousing company that collects rent income by renting tanks to the downstream petrochemical industry, and the other is a warehousing company that uses a certain standard chemical as the storage target to achieve delivery within the trading area. In the first type, the performance is affected by the operating rate and order stickiness of large downstream enterprises; the performance of the latter type of enterprises is mainly affected by the number and degree of activity of traders in the region, or by the degree of price activity of such chemicals. Overall, type 1 chemical storage companies have a relatively single customer structure, and downstream customer stickiness determines their market share and is easily affected by market competition; while type 2 enterprises have relatively little fluctuation in order volume because they have a large number of customers and have a certain regional advantage. Performance forecasting and valuation. We believe that although the company's tank capacity utilization rate has declined, the tank capacity expansion in the two new construction projects can make up for the decline in the company's revenue to a certain extent. The Hengqin Free Trade Zone is expected to have a positive effect on the company's 2014 results (the company registered two subsidiaries in the Hengqin New Area). The company's 2014-2015 EPS is estimated to be 0.429 yuan and 0.522 yuan, respectively, and the corresponding dynamic PE is 42.84 times 36.2 times, respectively. Risk warning: The company's expansion in foreign markets is blocked.