Incident brief review On February 13, 2019, the company announced that Suzhou Jucui signed a “PI Project Cooperation Agreement”. Relying on their respective advantages, the two sides jointly built PI resin and film production lines. It is estimated that the total investment amount of the project will not exceed RMB 200 million; the investment for the film forming and coating projects will be determined by Xinlun Technology's own planning, and the agreement period is two years. Incident analysis cooperation lays out the PI field for mutual benefit and mutual benefit, benefiting from the continuous rise in downstream demand. The company has been deeply involved in the field of membrane products for many years, and now has internationally leading film forming and coating technology and production lines, while Suzhou Jucui has been engaged in the development and application of PI materials for many years, and has deep material technology skills. The cooperation between the two companies will combine the dual advantages of material modification production and fine product manufacturing, and is expected to quickly form the production and sales capacity of PI films. Because PI film has good heat resistance, mechanical, and chemical stability, it is one of the key materials for the continuous improvement of flexibility in OLED screens. OLED screens have strong advantages in energy efficiency, color gamut, and bendability. With their application and promotion in high-end mobile phones and electronic products, the demand space for PI films will increase rapidly. Combining the advantages of both parties, this project is expected to quickly achieve production volume, thus quickly seizing the market. The leading position of aluminum-plastic film is stable, and the market space is broad, driving the company's profit to continue to rise: in recent years, new energy vehicles have driven the rapid development of soft-pack batteries, driving the continuous growth of aluminum-plastic film demand. By 2020, the domestic demand space will increase to about 300 million square meters. The company is the leader in the domestic power aluminum-plastic film industry, accounting for more than 70% of the market. With the launch of the second set of 3 million square meters/month aluminum-plastic film and the expansion of production lines in Japan, the company's overall annual production capacity is expected to increase to 100 million cubic meters. The company has successfully signed an 800,000,000-square-meter procurement agreement with Funeng Technology. Product It has already been recognized by downstream manufacturers, and it is expected that future development space will continue to increase, and it is expected that it will occupy a larger market. The functional materials business continues to develop, and profitability continues to improve: Benefiting from the continuous increase in the number of BOM materials for functional tape entering Apple terminals, and the gradual expansion of cooperation with new products from LG and OPPO, the company's electronic functional materials performance is growing rapidly. Qianhong Electronics completed the merger in the second quarter of 2018, and the annual performance promise of 150 million yuan is expected to be successfully completed. The optical film coating project at the Changzhou base was put into operation at the end of '18. Small batch shipments have now begun, marking that the company has successfully entered the field of optoelectronic display materials. Profit and Investment suggests that the company and Suzhou Jucui cooperate to lay out PI films, which will benefit from the continuous increase in demand for downstream OLED screens. At the same time, the company gradually expands its aluminum-plastic film and functional materials business, and profits continue to grow. The forecast for EPS from 2018 to 2020 is 0.40, 0.57, and 0.74 yuan, respectively. Currently, the stock price corresponding to PE is 32.7/23.0/17.6 times, respectively, maintaining the “increase in holdings” rating. Risks indicate a sharp decline in the macroeconomy, a sharp decline in corporate construction projects, and a sharp drop in demand