The company's market share is first in China and third in the world, and “thinner+high breathability” technology takes the lead: the company is one of the largest enterprises with the widest variety of cigarette supporting paper in China, with a comprehensive market share of 31.25%, ranking first in China and third in the world. In the long-term operation of the cigarette industry, it has developed two outstanding technical characteristics: thinness & high breathability. Relying on this, we continue to explore new blue ocean fields and find high-prosperity paper varieties to replace imports. This is the basic idea that the company can continue to develop rapidly over a long period of time. Reducing the damage from focusing is unstoppable. Highly breathable filter sticks are everywhere: the tar content of flue-cured cigarettes in China has always been higher than in foreign countries. Since 2010, mandatory focus reduction has been required, and the plan is to reduce the focus by 1 mg per year. However, highly breathable filter sticks are the most effective and immediate method for reducing tar content, so starting in 2011, they were widely used by downstream tobacco companies and developed rapidly. Prior to 2011, the company's annual sales volume of high permeability paper was only 1,000 tons, but in 2011 it rose sharply to 7,000 tons. With the general trend of energy saving and environmental protection, vacuum aluminized paper has become a new favorite: vacuum aluminized paper is mainly used for cigarette liners. The amount of aluminum used is 1/350 of ordinary aluminum foil liners, which is low in cost and easy to degrade. Furthermore, BOPP film is not used as a medium in production, and the process is also very environmentally friendly. Therefore, it is an important carrier for tobacco energy saving and environmental protection, and will replace existing aluminum foil liners and become a new favorite in the future market. In addition, vacuum aluminized paper can also be used for packaging other products such as alcohol, cosmetics, labels, etc., and the market potential is huge. Growth was stable in 2012, and 2013 and 2014 may welcome a major year of growth, and the rating was raised to “buy”: it is predicted that the company's 2012-2014 EPS will be 0.44, 0.61, and 0.83 yuan respectively, with growth rates of 17%, 38%, and 35% respectively. The corresponding PE will be 16X, 12X, and 9X respectively, and the rating will be raised to “buy”. Risk warning: Tobacco companies' bidding has caused prices to show a downward trend