The company has mastered the core technology of coal-to-ethylene glycol and achieved industrialization. As the application of the company's coal-to-ethylene glycol technology gradually matures, the load rate continues to increase, and the production capacity of ethylene glycol in Henan is released one after another, the company's future performance is highly flexible. Considering that the current load ratio of the company has not reached the profit point, the investment rating held by the company has been given for the time being. The company's main business has changed a lot over the years. Currently, coal-to-ethylene glycol has become the company's main industry: at the beginning of the company's listing in '93, its main business was the pen industry; since then, due to operational problems, the main business has experienced a process of transformation from the pen industry to the livestock and poultry industry to the coal chemical industry. Through cooperation with Fujian Construction Institute in 2007, the company experimented with the use of coal-to-ethylene glycol technology for industrialization and put into operation in 2009. The company's revenue in 2012 was about 1.1 billion yuan, of which ethylene glycol products accounted for about 56%. The coal-to-ethylene glycol business has become the company's main industry. The company took the lead in mastering the core technology of coal-to-ethylene glycol: ethylene glycol preparation is mainly divided into petroleum technology routes and non-petroleum technology routes. Currently, domestic ethylene glycol preparation mainly uses the former, that is, petroleum is pyrolyzed to oxidize ethylene oxide to ethylene oxide and rehydrate to obtain ethylene glycol. This method has a high production cost due to high water consumption and many by-products; therefore, the company and Fujian Construction Institute obtained the key technology for catalytic hydrogenation of oxalates and oxalates in coal-to-ethylene glycol technology. Relying on rich and cheap coal resources, it was successfully applied to industry and invested in 2009 Production. The load ratio of the ethylene glycol project is still not stable, and it will take time to make a profit: However, after nearly 4 years of operation, the company's ethylene glycol project is still in the process of continuous improvement, and the load rate is still not stable above the break-even point. Among them, the average load rate for the whole year of 2012 was 63%, and at one point it reached over 85% at the end of the year. However, in the first quarter of 2013, due to factors such as weather and technology, the average production load fell to about 30%, and is expected to remain around 60% throughout the year. According to our estimates, the average load rate of the company's ethylene glycol project must reach 70% before it can enter the profit stage. At this stage, there is still some distance from the break-even point. Ethylene glycol production capacity at the Henan base creates greater flexibility: In addition to owning its own set of coal-to-ethylene glycol plants with an annual output of 200,000 tons, Tongliao Jinmei has authorized five project companies under its joint venture to build coal-to-ethylene glycol projects with a total annual output of 1 million tons. According to the company Tongliao (200,000 tons, 54% interest) +Henan (1 million tons, 27% interest), the company's total equity production capacity is 380,000 tons. It is estimated that the Henan base will contribute about 80,000 tons of production to the company throughout 2013, accounting for about 50% of the company's total output. With the gradual improvement of the company's technology and the continuous increase in the operating load rate, the Henan base project will create greater flexibility in the company's performance. Profit forecast: The company is expected to lose about 100 million yuan in 2013, and may be able to reverse losses in 2014. Considering that the company's future performance is highly flexible, but the current operating rate is not stable, the company has been given an investment rating of “hold” for the time being. Investment risk: Uncertainty about the operating rate of the company's ethylene glycol project