Microprismatic reflective materials break the monopoly of the international giant 3M: The company is a leading domestic reflective material company. Benefiting from the increase in market share of license plate films and semi-finished license plate products and the rapid release of high-value-added microprism reflective materials, the performance maintained rapid growth in 16-18 years (compound growth rate of 105%). The global market for microprism films is 7 billion yuan, and the Chinese market is 3 billion yuan. Only one domestic company has broken the long-term foreign blockade on technology, processes and materials. The market share is expected to exceed 10% in 2019, and the gross margin is as high as 60%. It is expected to achieve revenue of 450 million yuan in 2020, maintaining revenue growth of more than 50%. The overall market space for reflective materials in China is over 8 billion yuan. In 2018, the company's revenue for reflective materials was 740 million yuan, with an overall market share of less than 10%, and there is a lot of room for future development. Endogenously entered the high-barrier lithium battery aluminum-plastic film industry, and the PC/PMMA project entered the 5G mobile phone supply chain within the year: Currently, aluminum-plastic film for power batteries almost relies on imports from Japan and South Korea. The company relies on self-generated technology accumulation, leading domestic aluminum plastic film performance, and signed an “Annual Framework Agreement” with Tianjin Lishen in '19 to form a practical cooperation framework. Some aluminum-plastic film products are used in the power battery sector. Refer to the development process of Zijiang New Materials (currently preparing to split on the Science and Technology Innovation Board), a subsidiary of Zijiang Enterprise. As 5G commercialization progresses, the market puts forward new requirements for mobile phone back panel materials, and metal materials will gradually withdraw from the market. PC/PMMA composites are expected to become mainstream mobile phone backpanel materials in the future due to their transparent glass-like performance and cost advantages. PC/PMMA films are mainly imported from Japan's Teijin, Sumitomo, etc.; the company's revenue is expected to gradually reach more than 400 million yuan within 3 years after the 20-year project is put into operation. Epitaxial acquires Warwick New Materials into the field of LCD optical films and new quantum dot film products: The company spent 350 million yuan to acquire Warwick New Materials into the LCD optical film field, with performance promises of 27 million yuan, 34 million yuan, and 44 million yuan respectively. The performance of the company's business handover period in '19 was partially affected. The price of the main product, the brightening film, dropped further. In addition, the quantum dot film added in '19 caused business losses due to lower production, higher fixed costs, and higher quantum dot and barrier film costs. Warwick New Materials's performance declined in '19 compared to '18, accounting for some impairment of goodwill. As the optical film sales business returns to normal and quantum film business volume losses decrease in 2020, Warwick New Materials's performance is expected to recover in 2020. The domestic optical film partner Changyang Technology was listed on the Science and Technology Innovation Board, and its quantum dot film counterpart, Nanocrystalline Technology, is also interested in being listed on the Science and Technology Innovation Board to promote rapid business development. Profit forecast and valuation: The company's net profit for 2019, 2020 and 2021 is estimated to be RMB 211 million, RMB 305 million and RMB 405 million, EPS of 0.34 yuan, 0.49 yuan and 0.65 yuan respectively, and PE of 22.6X, 15.6X and 11.8X respectively. It was rated for the first time and given a “buy” rating. The company was given 30 times PE in 2020, with a target price of 14.67 yuan. Risk analysis: Project commissioning falls short of expectations, downstream demand falls short of expectations.