According to the 2009 three-quarter report, in January-September, the company achieved operating income of 782 million yuan, a year-on-year decrease of 24.71%; operating profit of 54.4 million yuan, an increase of 16.31%; net profit attributable to the parent company of 43.57 million yuan, an increase of 18.62% over the previous year; and diluted earnings per share of 0.12 yuan; the company expects net profit attributable to owners of the parent company to increase between 20% and 50% year-on-year this year. Review of the company's business performance in the first three quarters: The company is one of the leading enterprises in the plastic packaging film industry in China, mainly engaged in the production and sale of BOPP and BOPET films. During the reporting period, the company's sales revenue fell 24.71% year on year, mainly due to weak downstream demand and falling prices for film products; since the decline in raw material cost prices was greater than the decline in product prices, the company's comprehensive gross margin increased 3.60 percentage points to 16.01% year on year; the sharp increase in gross margin caused the company's operating profit and net profit attributable to the parent company to increase slightly in both operating profit and net profit attributable to the parent company when operating income fell by more than 20%. Focus on the private issuance process: the company plans to privately issue 60 million to 11 million shares, with an issue price of no less than 6.74 yuan, and no more than 650 million yuan in capital raised after deduction of issuance fees. It is planned to invest in a new functional BOPET packaging film construction project with an annual output of 60,000 tons and an ecological food (BOPP/PP) composite film technology improvement project with an annual output of 12,000 tons; after the two projects reach production, the company's market sales scale is expected to double, and comprehensive competitive strength will be strengthened; we will continue to pay attention to this non-public offering after approval by the Supervisory Commission; The process of the company's current non-public distribution. Profit forecast and investment rating: Based on the company's three-quarter report performance, we adjusted our profit forecast. Without considering private additions, we expect the company's EPS for 2009-2011 to be 0.18 yuan, 0.21 yuan, and 0.25 yuan respectively, and the dynamic PE corresponding to the closing price of 6.72 yuan on October 29 is 37 times, 31 times, and 25 times, respectively. Considering that the company's profitability still needs to be further improved, we maintain its “neutral” investment rating. Risk warning: (1) industry competition is fierce, which has a great negative impact on the company's profitability; (2) risk of sharp fluctuations in raw material prices; (3) systemic risk in the capital market.