The year-on-year increase in performance was in line with company expectations: during the reporting period, the company achieved operating income of 159.9 million yuan, up 26.31% year on year, and the company realized net profit attributable to the parent company of 30.1 million yuan, equivalent to EPS of 0.22 yuan, up 10.13% year on year. The main reason for the increase in performance is that the company's fund-raising project of 20,000 tons of high-dispersion white carbon black projects reached production, contributing 10.45 million yuan in net profit throughout the year. The total sales volume of white carbon black, the main product, was 21,852 tons, up 13% year on year, lower than the increase in sales revenue. The main reason is that the average price of the company's products increased year on year. The burden on new projects is not high due to weak demand: demand for high-end silicone rubber exported to the European Union declined in 2012, causing the company's TMG product revenue to fall by 37%; furthermore, progress in high-dispersion white carbon black for green tires fell short of expectations. Poor demand caused the two newly built projects of the company to not have a high operating rate. The 20,000 ton fundraising project achieved a net profit of only 10.45 million yuan throughout the year, and the 30,000 ton overfunded project achieved a net profit of only 650,000 yuan throughout the year. In 2012, the production capacity of the white carbon black actually built by the company had reached 66,000 tons, and the actual output was only 22,000 tons. The load was not high. However, the completion and rehabilitation of the new project also led to an increase of 7 million yuan in depreciation expenses that the company needed to accrue. 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. In February 2012, the Ministry of Industry and Information Technology commissioned the Rubber Industry Association to formulate China's green tire self-regulatory standards and non-mandatory tire labeling classification methods, as well as a voluntary certification system for green tire products. Relevant standards and regulations will be introduced before the end of 2013, and it will accelerate the upgrading of green tire industry self-regulatory standards to industry standards and national standards, adopting voluntary and then mandatory steps. It is expected that the mandatory green tire classification label law will be implemented by 2017. Among them, in the non-mandatory grading stage, 50% of tire companies seeking to achieve green tire production capacity by 2015, and at least 50% of the production capacity will be green tires, that is, 25% of the total production capacity will be green tires. Investment advice: increase holdings - A investment rating, target price of 8 yuan for 6 months. We expect the company's revenue growth rates from 2013 to 2015 to be 16.5%, 30%, and 30%, and net profit growth rates of 24.8%, 31.4%, and 30.4% respectively. Increase in holdings with an investment rating of -A, and a target price of 8 yuan for 6 months, which is equivalent to a dynamic price-earnings ratio of 28 times that of 2013. Risk warning: demand falls short of expectations