Performance improved month-on-month: in the first quarter, the company achieved operating income of 29.97 million yuan, a year-on-year decrease of 2.93 percent, and the company achieved net profit attributable to the parent company of 5.62 million yuan, equivalent to EPS of 0.04 yuan, a year-on-year decrease of 29.16%. Affected by the domestic economic situation, demand in the silicone rubber market declined in the first quarter of 2013, which had a great impact on the company's production of white carbon black for silicone rubber. Therefore, the production and sales situation did not meet expectations during the reporting period, which had an impact on performance. Thankfully, in the first quarter of this year, net profit increased by 58.31% compared to the fourth quarter of last year. The gross profit margin and net profit margin for the first quarter also increased by 1.02 and 9.54 percentage points, respectively. The improvement in performance is expected to continue in the next quarter: due to poor demand in 2012, the operating rate of the company's two newly built projects was not high. The 20,000 ton fund-raising project only achieved net profit of 10.45 million yuan for the whole year, and the 30,000 ton overfunded project achieved net profit of only 650,000 yuan for the whole year. In the first quarter of this year, the company's 20,000 ton fund-raising project achieved a net profit of 4.3 million yuan, exceeding 40% of the net profit of the project for the full year of last year; the 30,000 ton overfunded project achieved net profit of only 650,000 yuan for the whole year, which is the same as the net profit of the project for the full year of last year. It is expected that as the company strengthens its sales channels, the load on fund-raising projects and overfunded projects will gradually increase. The domestic green tire labeling law is about to be introduced: China's green tire labeling law will basically refer to the EU labeling law system. By the end of 2013, China will also introduce relevant labeling standards and regulations after the European Union, Japan, South Korea, and the United States, and will accelerate the upgrading of the green tire industry's self-regulatory standards to industry standards and national standards. It is expected that by 2017, China will begin implementing the mandatory green tire classification law. Among them, in the non-mandatory classification stage, 50% of tire companies aim to achieve green tire production capacity by 2015, and no less than 50% of the production capacity is green tires, that is, 25% of the total production capacity will be green tires. It is initially expected that this will drive more than 300,000 tons of new demand for highly dispersed white carbon black. Investment advice: Increase holdings - A investment rating, target price of 8 yuan for 6 months. We expect the company's revenue growth rate from 2013 to 2015 to be 16.5%, 30%, and the net profit growth rate will be 24.8%, 31.4%, and 30.4%, respectively. The increase in holdings is -A investment rating, and the target price for 6 months is 8 yuan, which is equivalent to a dynamic price-earnings ratio of 28 times that of 2013. Risk Warning: Demand falls short of expectations