Event: Event: The company announced its semi-annual report for '17, and achieved revenue of 722 million, +55.6% year-on-year during the reporting period; net profit of 62 million yuan, +10.5% year-on-year, and a comprehensive gross profit margin of 22.56%, in line with the previous performance forecast range. Comment: 1. The steady growth in the company's performance was due to the basic stability of mainstream dye prices during the differentiated product positioning reporting period, while the company's dye positioning in the middle and high-end differentiation, such as high washing, microfiber, and digital printing, was the domestic leader. The product differentiation rate was over 50%, which determined that the company's performance growth remained stable. In fact, looking at a longer cycle, the company has maintained a compound revenue growth rate of more than 30% and a profit growth rate of more than 20% over the past 10 years, maintaining a leading position in the industry. 2. Dye prices have continued to rise recently. Since the company has returned to the fast track of growth and entered the third quarter, domestic dye prices have continued to rise due to environmental inspections and other factors. Currently, the latest price for scattered black has reached 40,000 yuan/ton, and the cumulative price has increased 54% in January. Recently, the fourth batch of environmental protection inspectors from the central government settled in Shandong, Zhejiang and other places. Relevant dye and intermediates companies have continuously shut down production restrictions, and supply continues to tighten; however, the high concentration of the dye industry and strong pricing capacity have determined that the impact of marginal improvements has been significant. We judge that this wave of environmental inspection will continue to heat up and ferment. As prices continue to rise, the actual order price center also continues to move up, and a significant year-on-year improvement in the performance of related companies can be expected. Every 1,000 yuan/ton increase in dye prices corresponds to a 0.04 yuan increase in the company's eps. The company's production capacity of 36,000 tons of disperse dyes has already been completed, and more than half of the 30,000 ton intermediate project has been put into operation. The sharp rise in volume and price is expected to return to the fast track of performance growth. 3. The diversified layout strategy gradually blossomed, helping the company to take off for the second time. While strengthening its main dye business, it also developed relevant diversified strategic layout in the fields of e-commerce, digital ink, environmental protection, and new materials in the dyeing and chemical industry, and established five major business divisions at the end of last year. Recently, projects have continued to be implemented, and the diversified layout strategy is gradually bearing fruit. For example, participating in Suzhou Ruifa (with priority rights to increase capital and stock expansion) is expected to fill gaps in the domestic digital nozzle sector; cooperate with Shanghai Jiao Tong University to establish a new material research and development center, focusing on new materials industry projects encouraged by the 13th Five-Year Plan, such as military-civilian integration, polymer functional films, and electronic chemical materials; lay out sewage treatment in the environmental protection sector, actively participate in government-led sewage treatment PPP projects; establish Qicaiyun e-commerce, pioneering the layout of dyeing e-commerce platforms, effectively integrating industry resources, reducing circulation costs, and creating a platform-based strategy. The above layout is expected to cultivate the company's new profit growth points and help the company achieve a second take-off. 4. Maintain the Strongly Recommended - A rating. At this point, environmental protection is putting strong restrictions on the supply side of the dye industry and continues to ferment. Dye prices continue to rise, and we are optimistic about the high elasticity of the company's performance. Furthermore, the diversified layout strategy is gradually blossoming, and new projects are continuously being implemented, which is expected to help the company take off for the second time. Additional dilution will not be considered yet. The EPS for 17-18 is expected to be 0.31/0.39, maintaining a highly recommended-A rating. Risk warning: environmental restrictions do not meet expectations, high dye prices continue to fall short of expectations