The wind power industry is picking up, and product prices are expected to rise. Tiansheng New Materials now has a production capacity of 7,000 tons/year of structural foam (PVC) materials, which is the company's main source of revenue. The cyclical correlation between structural foam materials and the wind power industry is huge. Demand for upstream wind power materials in China declined sharply in 2012, while the foreign wind power market was also sluggish. A large number of foreign structural foam materials poured into the country. In order to stabilize market share, the company's foam core prices fell 40%, and gross margin also fell sharply. In 2013, the installed capacity of new domestic wind power increased by 24%, and the tender price increased by nearly 15%. In 2014, the domestic wind power installation target is 18 GW, and the year-on-year increase is expected to reach 11.8%, and wind power demand will continue to grow. Product prices and gross profit levels are expected to rebound. Partner with 3A to resolve cash flow issues. The company issued an announcement in January 2014. The company signed a “Cooperation Agreement” with 3AC, designating 3AC as the exclusive agent and distributor of contract products in all countries and regions around the world, and stipulating that PVC or light wood materials produced by Tiansheng New Materials should be provided by 3AC as light wood, and Tiansheng New Materials is only responsible for reporting processing fees. This move will help improve the company's operating cash flow and strengthen cost control. Get involved in the sound barrier business and enter the field of high-speed rail development. The company plans to purchase 100% of Xinguang Environmental Protection's shares by issuing shares and paying cash. Xinguang Environmental Protection is a specialized enterprise engaged in R&D, production and sales of new environmentally friendly and noise-reducing materials for railways and rail transit, and has second-level environmental construction qualifications. The main products are various sound barriers. The original shareholders of Xinguang Environmental Protection promised that the net profit achieved in 2014, 2015, and 2016 would not be less than 26 million yuan, 36 million yuan, and 58 million yuan. Tiansheng New Materials can fully enjoy the rapid growth of Xinguang Environmental Protection. Performance forecasting and valuation. Based on the company's acquisition of 100% of Xinguang Environmental's shares in 2014, we forecast that the company's operating income in 2014 and 2015 was 1,088.97 million yuan and 1,370.55 million yuan respectively, and net profit attributable to listed companies was 36.44 million yuan and 68.97 million yuan respectively. The corresponding total share capital after issuing shares was 336 million yuan, earnings per share were 0.11 yuan and 0.20 yuan respectively, corresponding to the closing price of 7.68 yuan on March 11, 2014. The corresponding PE was 70 times and 38.4 times, respectively, given for the first time” “Carefully recommended” rating. Risk warning: Fluctuations in product and raw material prices, unsustainable prosperity in the downstream wind power industry, and the risk of new product market expansion.