In the first quarter of 2013, the company achieved operating income of 208 million yuan, up 7.28% from the same period last year; operating profit of 17.85 million yuan, down 31.37% from the same period last year; net profit belonging to the owner of the parent company was 16.05 million yuan, down 27.95% from the same period last year; and realized basic earnings per share of 0.03 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 matching paper, filter paper, special food packaging paper and power batteries. The company's main products are closely related to the macro-economy at home and abroad. In the first quarter of 2013, the domestic macro economy as a whole still showed a weak recovery, and the company's main products continued the market pattern of 2012. From January to March, the company achieved operating income of 208 million yuan, down 14% from the fourth quarter of 12, an increase of 7.3% over the same period last year, and an increase of 0.5% over the fourth quarter. Taking into account the Spring Festival factors and the characteristics of low revenue in the first quarter of previous years, we believe that the year-on-year changes in revenue are more worthy of attention. At present, the trend of further expansion of growth has yet to be further established. In terms of product profits, due to the increasingly fierce market competition caused by the supply and demand pattern, the comprehensive gross profit margin of the company's products fell 1.9 percentage points to 31% year on year, the third consecutive quarter of decline, but the rate of decline has narrowed. Compared with the fourth quarter, it has rebounded by 2.1 percentage points.

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 the field of special paper products in China. From the three aspects of product research and development, technical transformation of production line and capacity expansion, the company takes into account quality, efficiency and cost, implements business strategy and meets future challenges. The company has formed a unique core technology, formula and process in the field of electrical paper and special long fiber paper, highlighting the core competitiveness, while in terms of electrolytic capacitor paper, the company is the only manufacturer in China that can serialize the production of electrolytic capacitor paper. its research and development of a variety of products have filled the domestic gap, to achieve domestic initiative and exclusive production, a number of production technologies have reached the world's advanced level. Recently, 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 imported products and help to improve the demand pattern of the company's products, but we also believe that The trend of the 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 0.20 yuan and 0.23 yuan respectively, according to yesterday's closing price, the corresponding dynamic price-to-earnings ratio is 29 times and 25 times respectively. Maintain a "neutral" investment rating.

Risk hint. 1) the risk of price fluctuation of raw materials such as bleached wood pulp, insulating wood pulp and hemp pulp; 2) the risk of macroeconomic adjustment exceeding expectations.