Focus on viscose staple fiber production, leading the industry in comprehensive strength. The company has nearly 50 years of experience in the production of viscose fiber, and its comprehensive strength is at the forefront of its peers. The main products are viscose filaments and viscose staple fibers. Currently, it has a production capacity of 80,000 tons of viscose staple fibers and 20,000 tons of viscose filament. It also holds 30% of Lanjing (Nanjing)'s shares, and has a production capacity of 160,000 tons of viscose staple fibers. In the first three quarters of 2016, the company achieved revenue of 1,139 billion yuan, a year-on-year decrease of 0.72%; realized net profit of 569.079 million yuan, a year-on-year decrease of 87.61%, achieving EPS of 0.18 yuan; the large decline in the company's revenue and profit was mainly due to the high return on long-term equity investment in the disposal of Jinling Real Estate in the third quarter of last year. The real estate divestment business focuses on the production of adhesives, and the company is the most flexible target in the industry. In order to implement the requirement that “state-owned enterprises no longer participate in commercial housing development in principle,” the company officially divested the real estate development business in August 2015 to focus on the main viscose fiber business. In 2015, sales volume of viscose staple fiber was 74,800 tons, up 87.47% year on year; revenue reached 780 million yuan, up 74.15% year on year. At the same time, with the continuous implementation of the localization strategy, Lanjing Nanjing, which the company and Austrian Lanjing Group jointly invested, has gradually improved in recent years. In 2015, it achieved revenue of 1,833 billion yuan and achieved net profit of 2.9306 million yuan, turning a loss into a profit. As the world's largest producer of cellulose, the Austrian Lanjing Group has also continuously improved the quality of the company's viscose fiber products and optimized the industrial structure. The price of viscose staple fiber has rebounded steadily, and the boom is promising until 2018. Since October 2016, as downstream enters the off-season, the price of viscose staple fiber has begun to fall, falling from a high of 17,000 yuan/ton to about 15,000 yuan/ton. Recently, the market atmosphere for viscose staple fibers has improved, product prices have rebounded steadily, and industry inventories have re-entered a downward phase, returning to around 7-13 days. Under the combined influence of the slow growth rate of new production capacity, stable demand growth, and increased environmental requirements, the supply and demand pattern for viscose staple fibers continues to improve, and product prices are expected to rise sharply again as the peak season after the Spring Festival approaches next year. On the other hand, the spot and futures prices of cotton are already close to 16,000 yuan/ton, and the strengthening of cotton prices will also provide important support for the price of viscose staple fibers. We are optimistic that the prosperity of the viscose staple fiber industry will continue to rise until 2018, and the profitability of related enterprises will increase dramatically next year. State-owned enterprise reform continues to advance, bringing new opportunities for transformation. After transferring Jinling Real Estate for 772 million yuan, the company obtained the capital needed for development, which helped the company to use its technical advantages to accelerate the transformation and upgrading of the viscose fiber business. It also provided conditions for the company to actively participate in a new round of state-owned assets reform and transform into new industries and fields. Furthermore, in 2015, the group company appointed Wang Chengjun, the former manager of the investment planning department of Nanjing Xingong Investment Group, as the company's director. His rich financial investment experience will also help the company accelerate the pace of transformation and development. Profit forecasting and investment advice. We expect the company's EPS in 2016-2018 to be 0.26, 0.37, and 0.47 yuan. Referring to the valuation level of comparable companies in the industry, the current stock price is about 35 times higher than the 2017 EPS valuation, which is about 17 times higher than the industry average. For the first time, there are no ratings yet. Risk warning. Product quality risks, policy and regulatory risks, environmental risks.