Xinlun Composite, a subsidiary of the company, and Funeng Technology signed a 2019 aluminum-plastic film product procurement agreement, agreeing that the supply demand for aluminum-plastic film products in 2019 is 8 million square meters, and the company will continue to maintain deep cooperation with Funeng. In 2018, the total installed power of soft pack power batteries for new energy vehicles was about 7.62 GWh, an increase of 63.5% over the previous year, accounting for 13.4% of the total installed electromechanical power. If 1 Gwh corresponds to 1.5 million square meters of aluminum-plastic film, the corresponding demand for aluminum-plastic film is about 11.5 million square meters. Among them, Funeng is the company with the largest number of flexible packaging machines in China. It reached 1.84 GWh in 2018, accounting for 24.15% of the domestic soft pack power battery installed. The company accounted for more than 80% of Funeng's aluminum-plastic film supply. In 2018, Difuneng signed a huge order with Daimler. In 2021-2027, the supply scale reached 140 GWh corresponding to the total demand for aluminum-plastic film of about 210 million square meters, with an average annual demand of about 30 million square meters. The order between Durham and Funeng indicates that soft pack file batteries are about to enter a stage of rapid increase in penetration rate. With the release of new energy vehicles, there is huge market space in the future. In 2016, the company acquired Toppan Printing's aluminum-plastic film plant and related assets in Mie Prefecture, Japan, and currently has a production capacity of 2 million square meters/month. The first production line of the company's Changzhou aluminum-plastic film factory with a production capacity of 3 million square meters per month was officially put into operation in the fourth quarter of 2018. The silver and black aluminum-plastic films used in consumer electronic product filing batteries have all been certified by ATL and other major customers, and production is expected to be close to 500,000 square meters in January 2019. The power aluminum-plastic film products at the Changzhou plant are also actively carrying out customer certification work, and it is expected that batch supply will be achieved in the second quarter of 2019. After the second production line for aluminum-plastic film in Changzhou with a production capacity of 3 million square meters per month is put into operation in 2020, the company will have a total production capacity of 8 million square meters/month, becoming the world's largest producer of aluminum-plastic film. In 2018, the company's share of the domestic power aluminum-plastic film market was over 70%. In the future, with the gradual release of customer production capacity, the sales volume of power products is expected to continue to double year by year. The company expects the total shipment volume of aluminum-plastic film products from Mie in Japan and Changzhou in China to be no less than 30 million square meters in 2019. Currently, the main raw materials of the company's aluminum-plastic film are still dependent on imports, which suppresses the company's gross profit margin. In the future, as the localization of raw materials progresses, the company will achieve a double increase in sales volume and profit margin, and profitability will increase dramatically. Performance forecast: The company is expected to achieve net profit of 450/6.62/981 million yuan in 2018-2020, corresponding to PE 27/18/12X, and maintain the “buy” rating. Risk warning: The risk that the company's product sales fall short of expectations and production capacity release fall short of expectations.