Annual performance was under pressure. Q4 improved month-on-month in a single quarter. In 2019, the company achieved operating income of 617 million yuan, a year-on-year increase of 5.15%, net profit of 147 million yuan, a year-on-year decrease of 18.54%, a year-on-year decrease of 141 million yuan, a year-on-year decrease of 15.82%, and EPS of 0.3137 yuan/share, mainly affected by factors such as trade frictions between China and the US, the decline in the automobile industry, and the increase in raw material prices; among them, Q4 achieved revenue of 178 million yuan in a single quarter, up 21.23% year on year, up 21.23% year on year, up 23.23% year on year, up 23.24 percent year on year %, achieving net profit of 32 million yuan, a year-on-year decrease of 21.85% and a year-on-month decrease of 5.79%. The decline was narrower than Q3, mainly because the company adjusted its market strategy in a timely manner, accelerated launch of the Asia-Pacific and domestic markets, and launched a dual brand strategy. High-end products bucked the trend, and the increase in cost rates dragged down the growth of profitable high-end products such as cosmetics grade and glass substrates. The product structure continued to be optimized. However, the lower gross profit margin of Immer brand products lowered overall gross profit, resulting in a year-on-year decline of 1.58 percentage points to 44.55%. The gross profit margin for the Q4 single quarter was 39.24%, down 6.56 percentage points from the previous month. The cost ratio for the period increased by 3.65 percentage points to 17.24% year on year, of which the sales expense ratio increased 1.09 percentage points to 8.13% year on year, mainly due to the company's strengthening of the domestic market and new brand development; the management expense ratio increased 0.96 percentage points to 5.4% year on year, mainly due to the increase in management personnel and the increase in depreciation of fixed assets and the increase in amortization of fixed assets; and the increase in interest expenses due to reduced exchange earnings and increased loans. In addition, a reduction in government subsidies of 4.89 million yuan and a decrease in financial income from raising capital led to a decrease in investment income of 6.21 million yuan, further dragging down profits. Project construction is progressing steadily to release elasticity and enhance market competitiveness. The company has completed the fund-raising project “30,000 tons of pearlescent materials project per year”; the titanium dichloride project with an annual output of 200,000 tons has also been officially put into operation. It is expected that production will be completed in August 2020, which can greatly reduce costs and improve product quality. Meanwhile, construction of the 100,000-ton high-end titanium dioxide project began in the second half of 2019. It is expected that the first one will be put into operation in August 2020 and the second one in December 2020, further extending the industrial chain, enriching the product line, and enhancing the company's market competitiveness. Leading pearlescent materials, performance elasticity and growth space are expected to open up. Maintaining the “buy” rating As the fund-raising project is put into operation, the company has become the world's largest pearlescent material manufacturer, and its market share is expected to increase steadily. The launch of the titanium dioxide project will replace raw materials, provide performance elasticity, and at the same time, the extension of the industrial chain is expected to further open up room for growth. The EPS for 20-22 is expected to be 0.49/0.70/0.87 yuan/share, respectively. The corresponding PE is 48/34/27x, maintaining the “buy” rating. Risk warning: High-end product volume falls short of expectations; capacity release falls short of expectations