In the first three quarters of 2013, the company achieved operating income of 706 million yuan, up 13.71% from the same period last year; operating profit of 58.2336 million yuan, down 29.41% from the same period last year; net profit belonging to the owner of the parent company was 48.3999 million yuan, down 28.71% from the same period last year; and realized basic earnings per share of 0.10 yuan.

Revenue increased compared with the same period last year, and gross profit margin fell year-on-year. The company is mainly engaged in the production and sales of industrial paper, filter paper, special food packaging paper and power batteries. The operation of the main products is closely related to the macro-economy at home and abroad. Since 2013, the overall domestic macro-economy has shown a weak recovery pattern, resulting in a small increase in revenue from the company's main products compared with the same period last year. In the first three quarters, the company's revenue in the first three quarters increased by 7.28%, 23.19% and 10.53% respectively compared with the same period last year, and the shock upward pattern continued. In terms of product gross profit margin, due to the lack of a significant rebound in selling prices, the comprehensive gross profit margin in the first three quarters was 31.0%, 26.41% and 28.25% respectively, all declining to varying degrees from the same period last year, and the downward trend of gross profit margin since the third quarter of 2012 has not yet ended. Looking forward to the fourth quarter, we believe that under the pattern of temporary macroeconomic stabilization, the company's revenue is expected to continue to recover from the same period last year, but in terms of cost, pulp prices show signs of stabilizing, if the price increase of specialty paper cannot be implemented, then the downward pressure on gross profit margin will still be greater.

Research and development, technical transformation, production expansion, the company's long-term development foundation is still there, electrolytic capacitor paper anti-dumping ruling is expected to promote the improvement of product supply and demand. At present, the company is in a leading position in some domestic special paper products, especially electrical paper and special long fiber paper has formed a unique core technology, with a unique technical theory, product formula and production process. Many kinds of electrolytic capacitor paper developed by the company have filled the domestic blank. The high purification technology, low loss technology, high voltage and low impedance technology, long fiber finishing technology, ultra-low quantitative molding technology and chemical fiber wet forming technology in the production of electrolytic capacitor paper have reached the advanced level in the world. In April this year, the Ministry of Commerce issued a final ruling on the final review of the anti-dumping period of electrolytic capacitor paper, stipulating that the import of electrolytic capacitor paper originating in Japan shall be subject to anti-dumping duties for a period of five years. considering that Japan is in an international leading position in the production level of electrolytic capacitor paper, the implementation of anti-dumping will have an impact on the competitiveness of the country's export products and help to improve the demand pattern of the company's products. However, at present, the trend of economic situation at home and abroad is still the biggest variable of the company's performance, which fundamentally depends on the improvement of production and marketing and the smooth transmission of raw materials, labor and other cost factors to the downstream.

Profit forecast and investment rating. It is estimated that the company's earnings per share from 2013 to 2014 are 0.13 yuan and 0.15 yuan respectively, according to yesterday's closing price, the corresponding dynamic price-to-earnings ratio is 43 times and 38 times respectively. Maintain a "neutral" investment rating.

Risk hint. 1) the price fluctuations of raw materials such as bleached wood pulp, insulating wood pulp and hemp pulp exceeded expectations; 2) the uncertainty of the process of macroeconomic recovery.