The decline in performance was in line with expectations: during the reporting period, total operating income was 384.77 million yuan, a year-on-year decrease of 9.2%; net profit attributable to shareholders of listed companies was 16.48 million yuan, equivalent to EPS 0.03 yuan, a year-on-year decrease of 11.5%; net profit attributable to the parent company increased 16% after deducting non-recurring profit and loss. In the first quarter, the company's gross profit margin and net profit margin were 13.66% and 4.28%, respectively, up 1.9 and 0.12 percentage points from the previous year; there was a year-on-year decline of 4.92 and 4.74 percentage points, respectively. 2014 will be the peak period for the company's new project to be put into production: 1) The main equipment order for the “differentiated DTY nylon filament with an annual output of 20,000 tons” project has been completed. In order to better meet the raw material requirements of the DTY fund-raising project, the company plans to build a “annual output of 20,000 tons of DTY” fund-raising project while supporting the “differentiated spinning with an annual output of 50,000 tons” project. In order to rationally utilize resources, the company will simultaneously build a “DTY with an annual output of 20,000 tons” fundraising project and a “differentiated spinning with an annual output of 50,000 tons” project to maximize resource utilization. The project will complete the civil construction tender by October 2012; major equipment orders will be completed by December 2012; equipment installation is scheduled to begin in June 2013; and commissioning and production will begin in May 2014. 2) The “Differentiated Nylon Filament Project with an Annual Output of 50,000 Tons” project is in the civil construction phase. It is being constructed simultaneously with the fund-raising project “Differentiated DTY Nylon Filament with an Annual Output of 20,000 Tons”. It is expected that commissioning and production will begin in May 2014. 3) Hangzhou Hangding Nylon Technology Co., Ltd. “Annual output of 80,000 tons of nylon (polyamide) slices” project phase I project has a production capacity of 80,000 tons. Production is expected to be commissioned in October 2013. Investment advice: Considering that new investment projects may not be profitable until 2014, we expect the company's revenue growth rates from 2013 to 2015 to be -1%, 33%, and 25%, and net profit growth rates of 1%, 32%, and 38% respectively; maintain a neutral -A investment rating, with a target price of 4.5 yuan for 6 months, equivalent to a dynamic price-earnings ratio of 38 times that of 2013. Risk warning: risk of changes in the macroeconomic environment, risk of fluctuations in raw material prices