The large layout, vertical integration development company specializes in TFT modules, and mainly supplies ZTE and Huawei. After listing, the company expanded its product line vertically, and has now basically completed the construction of CTP, LENS, and CTP+TFT product systems, and the vertical integration support is getting better and better. The company currently has two production bases in Shenzhen and Changsha, and has basically achieved a vertically integrated production capacity of 3 kk/m. TFT modules and sensors are fully self-sufficient, and one-third of LENS is sold outside of its own use. After 12 years of yield climbing, product yield is gradually approaching the industry average. In response to the market supply and demand pattern, medium and large CTP has become the focus of the company's planning, and will lay out 7-inch, 10-inch, and 15.6-inch products. The poor execution of ZTE's orders was the main cause of losses in 2012. 2012 was a year in which the company actively carried out industrial layout, accelerated investment in software and hardware, and production capacity was expanded and production ran in. Among them, the company signed a framework agreement with ZTE Kangxun in early 2012 and expanded production capacity around ZTE demand. (1) Since there are some problems with product design during the company's transformation process, there is a process for product development and certification. The company achieved sales revenue of 560 million yuan for ZTE Kangxun for the full year of 2012, which fell far short of expectations. (2) Due to technological upgrades in the touch market and changes in the size of product demand, the company lost about 30 to 40 million yuan in asset impairment in 2012. (3) Due to the large increase in capital requirements during the expansion of production capacity, the company's financial expenses have increased dramatically. The combination of the above three reasons caused the company to lose a lot in 12 years. In response to the impact of individual customers on the company's business in 2012, the company actively adjusted its customer strategy, introduced customers such as Hisense and Konka, and strengthened cooperation with Huawei in the tablet field. However, it is expected that in the short term, ZTE will remain the company's main customer. The company has entered a late stage of transformation. OGS is an important focus for 13 years. Currently, the company has established integrated display and touch control production capacity, increased yield on the basis of full run-in, and developed OGS and other products on the basis of strengthened technical reserves. At the same time, the company's private issuance has been approved. With capital raised in place, the Chibi project will strengthen the company's competitive strength in the LENS and medium to large CTP markets. In terms of choosing technical solutions, the company believes that OGS technology is becoming more mature and has market competitiveness, and demand is expected to be released in the second half of the year. The company will shift from existing large-scale technology (suitable for large orders) to monolithic technology (low operating costs) to reduce production line costs and mold opening costs and increase production line continuity. This transformation of the company's technical plan highlights the company's business strategy of strengthening cost control and adapting to the domestic market's “machine sea tactic”. Yield is a key factor in OGS marketing. Since the automation level of most OGS production lines is higher than that of traditional LENS companies, the yield of OGS products has the conditions to surpass the latter, but progress falls short of expectations. The industry estimates that an OGS yield of 80% or more will have a cost advantage, which is expected to greatly increase market share. Currently, the yield of industry-leading OGS is about 70%, while the yield of the company's OGS products is about 50% to 60%, which still needs to be improved. After being given a “neutral” rating for the first time, after a run-in period of capacity expansion, the company's production and sales are expected to resume normal operation in 13 years. However, the yield of the company's new products still needs to be further improved, it does not have a cost advantage in market competition, and its profitability needs to be improved. Furthermore, the company's balance ratio is far above the industry average, and the progress of private issuance matters will have a significant impact on the company's business progress and financial expenses. We expect the company's 2012-2014 EPS to be -1.66, 0.16 and 0.62 yuan respectively. The current stock price already reflects the company's profit improvement expectations, giving it a “neutral” rating for the first time.