1. Overview of the incident Recently, we visited the company for research and exchanged views with company executives on business conditions and industry development prospects. 2. Analysis and judgment of viscose staple fiber: The industry is still at the bottom, and will gradually improve in the future. The company's leading product is “Jinling” brand viscose fiber. Currently, the company's two viscose staple fiber lines have a production capacity of 80,000 tons, and viscose filament is currently 18,000 tons. The company has a stake in Lanjing's Nanjing production capacity of 160,000 tons (the company has 30%) interest. After the Spring Festival this year, the company's second line of viscose staple fiber was put into production. Currently, due to sluggish downstream demand, the company's viscose staple fiber is still in a slight loss, and the inventory level has also increased compared to last year. Since there will be less production capacity for viscose staple fibers in the next two years, the industry pattern will gradually improve. The company's viscose staple fiber will gradually get rid of the loss situation. Real estate has become the company's second main business: it will continue to contribute to the company's performance. The company established a subsidiary, Nanjing Jinling Real Estate Development Co., Ltd., in 2009. It successfully won the right to develop the original factory plot and commenced development of the project in April. The real estate business is expected to become the company's second main business. The company began selling real estate on September 18, 2010, and the real estate business began a harvest period in '11. The “Lejuya Garden” project developed by Nanjing Jinling Real Estate Development Co., Ltd., a holding subsidiary of the company, mainly serves rigid demand and improved demand. Lejuya Garden is divided into four phases of 560,000 square meters. As of 2012, the company's Lejuya Garden has settled about 96,200 square meters. This year, the company expects to settle some of the Lejuya Garden Phase II projects in the fourth quarter. In the future, the company will position real estate as the company's second main business, and will continue to acquire land in the future. The future utilization rate of tap water will be greatly increased, and the current production capacity is 150,000 tons per day. Previously, it was mainly used for personal use. After the relocation, all takeout was carried out. Currently, 50,000 tons of water are supplied to the outside world every day, with a gross profit margin of around 50%. 100,000 tons of production capacity is idle. In the future, 100,000 tons of tap water will be used for landscape water projects, and the utilization rate of the company's future tap water will increase dramatically. Public works will remain stable in the future. Currently, the company has two utility projects, some of which provide support for viscose filament. The rest is supplied to Nanjing Lanjing sewage treatment, steam, waste heat power generation and other utility projects. According to the company's April 18 announcement, the actual amount of 12-year related transactions between the company and Lanjing Company was 205 million yuan. Related transactions are expected to be $202 million in '13. The company's utility business will remain stable in the future. Actively develop the modern service industry and form new economic growth points. The company plans to use shareholders' resources to explore the modern service industry. There are 2 major projects in 2013: (1) Nanjing Ancient Heritage Cultural Business Travel Co., Ltd. (90% of the company's holdings), mainly hotel chains featuring Nanjing's intangible heritage culture. (2) Nanjing Xinghuacun Culture Development Co., Ltd. (55% holding) mainly relies on the transformation of Nanjing's old town south. Build the Xinghuacun International Cultural Expo Park. The estimated annual revenue is 60 million yuan. 3. Profit forecasting and investment recommendations expect the company to have an EPS of 0.34 or 0.61 yuan in 13-14, giving the company a careful recommendation rating. 4. Risk warning: the risk of a downturn in the viscose staple fiber boom, etc.