In the short term, the economy is good now. The suspension of the white grass area will lead to a substantial increase in fine powder production in 2013-14, but the weak downstream demand, coupled with domestic production surplus, will lead to a return to a 12-year high in the short term. According to the research, the output of fine powder in China has declined, while the cost is still on the rise. Among the external factors, the surplus of fine production has caused a sharp drop and return to a high level. Our 14-year profit forecast for the company is 52.1% and 52.9%, respectively, and the estimated EPS for 14 years is 0.12pm and 0.13 yuan respectively. The lower level of the company is "neutral", while the heading ranges from HK$2.16 to HK$1.30, and the corresponding company's PE in 2014 is 8.0x.

In terms of output: major mining areas shut down: in order to protect the mineral resources found in the white grass area, the company decided to stop the opening of the white grass area in July as the company's largest mining area, accounting for about 23% of the company's fine powder output. The continuous shutdown for more than one year has greatly reduced the company's fine powder output in 13 and 14 years. In 2013, the output of our company increased from 2.4 million tons / 2.75 million tons to 207.6 million tons / 2.2 million tons, with a drop of 13.5% and 20.0% respectively. The progress of ball production has been slow: 1) the production of ball production has been shut down: in August this year, the company closed a ball mine with a production capacity of 360,000 tons and replaced it with a new one of 1 million tons. Because it is newly put into production, the utilization rate of production and capacity is also at a low level, with an output of 257,000 tons in the first half of this year. 2) winners: Sichuan Province has built new ball production capacity in order to reduce the cost, resulting in an increase in the volume of refined powder, but a sharp drop in ball production compared with the same period last year.

In terms of quality, the sales of fine powder are flat, while those of fine powder are back to a high level. 1) compared with the same period last year, the market for refined powder in the inland region was stable, and there were no major changes compared with the same period last year, reflecting the relative balance between supply and demand in the region: the price of refined powder fell only 2.4% compared with the same period last year. 2) due to the reduced demand from downstream raw materials, real estate and related industries, the energy utilization rate of domestic white powder production is only about 60% and 70%, coupled with the fact that the pace of energy consumption is still continuing. in the short term, domestic fine powder has returned to its high level in 2011-12, with the average sales of refined powder reaching 874 yuan per kilogram this year, down 27.7% in the same period last year.