The report explains that the company's PCM/VCM products will develop steadily along with the industry. In the future, it will gradually increase investment in fields such as suslike and decoration materials, and embark on the path of transformation and upgrading. Key investment points In the future, the company will transform and develop the company's revenue of 538 million yuan and net profit of 22.07 million yuan in the first half of the year. Currently, 95% of products are used for home appliance exterior materials (VCM/PCM), and the company's products can also be used for decoration, elevators, etc. In the future, it will increase its differentiated management efforts and gradually enter other business fields. Suslike, building decoration supplies will become the company's new growth point 1. Traditional products are developing steadily along with the industry. Currently, exterior materials are mainly used for refrigerators, washing machine side panels and panels, and is one of the leading enterprises in the domestic home appliance panel materials industry. In the future, as the growth rate of the domestic ice washing industry gradually slows down, the company's traditional products will grow steadily with the industry. 2. Suslike expects batch supply companies to start developing and investing in Suslike products in 2012. The product has now been sent to Samsung, Siemens and other companies for trial use. It mainly replaces stainless steel products in high-end refrigerators and washing machines. The company's products have a high cost performance advantage. It is expected that they may be tested in small batches by the end of the year. The product design and production capacity is 1,500 tons/month, and production is expected to reach 500 tons/month by the first quarter of 2014 at the latest. 3. Building decoration materials will become one of the company's development directions. The company's products can also be used to replace decorative products such as wall tiles. The cost advantage is obvious: the unit price of wall tiles is more than 100 yuan per square meter, while the price of the company's products is less than 50 yuan. The product production line will be installed in the first half of 2014. After completion of commissioning, mass supply is expected to begin at the end of 2014. Profit forecast and valuation We estimate that the company's earnings per share for 2013, 2014, and 2015 will be 0.22 yuan, 0.29 yuan, and 0.35 yuan, respectively, corresponding to dynamic price-earnings ratios of 40 times, 31 times, and 26 times, respectively. Although the current valuation of the company is relatively high, we believe that transformation can be expected in the next two years, and there is a high possibility of a reversal in performance, and maintain an “incremental” investment rating.