The results of the three-quarter report fell short of expectations: operating income for the first three quarters was 117 million yuan, down 3% from the same period last year; net profit attributable to owners of the parent company was 21.56 million yuan, down 19% from the same period last year; and basic earnings per share was 0.16 yuan. Among them, operating income for the third quarter was 38.38 million yuan, up 2% from the same period last year; net profit attributable to owners of the parent company was 3.79 million yuan, down 14% from the same period last year, and basic earnings per share were 0.03 yuan. Results for the third quarter fell short of expectations. The main reason why the performance of the third quarter report was slightly lower than expected was poor demand: the third quarter results fell short of expectations. The main reason was that due to the impact of the domestic economic situation, the decline in demand in the silicone rubber market in the third quarter of 2013 had a great impact on the silica black used in silicone rubber produced by the company, so the production and sales situation during the reporting period fell short of expectations, which had an impact on performance. The annual output of 20,000 tons of high-dispersion precipitation silica and the annual output of 30,000 tons of deep-deposition silica cannot be produced at full capacity, and depreciation of fixed assets has increased. Furthermore, the matting agent product, which is one of the company's main products, did not receive revenue in 2013 due to poor sales channels, which seriously affected the company's performance. In the future, the company will continue to reduce costs and increase efficiency through technological innovation and management innovation, and expand sales channels by speeding up the industrialization process and promotion of products, so that production capacity for capital raising projects can be fully released as soon as possible. Investment suggestions: The company's revenue growth rates from 2013 to 2015 are expected to be -0.5%, 30%, and 30%, respectively, and net profit growth rates of -8.2%, 30%, and 32% respectively; maintain an investment rating of -A to increase holdings. The target price for 6 months is 8 yuan, which is equivalent to a dynamic price-earnings ratio of 30 times that of 2014. Risk warning: raw material prices are rising, market development is lower than expected