Key investment points: EPS of 0.33 yuan in 2012, slightly lower than our estimate of 0.34 yuan. The company achieved operating income of 3.6 billion yuan (-1.6%) in 2012, net profit attributable to shareholders of the parent company of 423 million yuan (-27%, after deduction -24%), and EPS of 0.33 yuan, slightly lower than our expectations. Cash flow from operating activities in 2012 was 240 million yuan (+52%). The distribution plan is to distribute a cash dividend of 0.5 yuan for every 10 shares. Product prices fell sharply in 2012. Production capacity in the chlor-alkali industry continued to expand in 2012. Demand growth was weak due to domestic and foreign economic downturn, and the oversupply of PVC and other products became more and more serious. The company's PVC price in 2012 was reduced by 1,000 yuan/ton compared to the previous year, and ferrosilicon products were also reduced by 600-700 yuan/ton. In addition, coal prices have also declined. Although falling coal prices have relieved cost pressure, the company's revenue from selling refined coal outside the company has also been affected. Gross profit margins have remained generally stable. The company not only uses coal as a raw material, but also sells some of it out, so falling coal prices have both positive and negative effects on changes in the company's gross margin. The company's comprehensive gross profit margin in 2012 was 30%, down 0.5 PCT from 2011. By business, PVC decreased by 7.5 PCT, electricity decreased by 12.5 PCT, coal decreased by 2.7 PCT, and alkali increased by 17.1 PCT, and liquid alkali increased by 13.3 PCT. This is basically the same trend in the industry. The pattern of “supplementing chlorine with alkali” in the chlor-alkali industry is still very obvious. Due to complete self-sufficiency in coal resources, the company's gross margin remained stable in 2012 among chlor-alkali companies. The increase in performance in 2013 is expected to come mainly from the Ordos Junzheng Project. At the end of 2012, the Ordos Junzheng 600,000-ton PVC/caustic soda project had completed 75% of the schedule. It is expected to be fully completed and put into operation in 2013, contributing to performance. Furthermore, after the completion of this project, the electricity consumption load of Beifang Electric Power, in which the company is a shareholder, is expected to be guaranteed, the profit situation will improve, and the company's return on investment is expected to increase. risk factors. Industry capacity expansion, product price drop risk. Construction of the new project fell short of expectations. Profit forecasting and valuation. Production capacity in the chlor-alkali industry continues to expand, competition is becoming more intense, and demand growth is difficult to exceed expectations. We lowered the company's 2013/2014 EPS forecast to 0.41/0.50 yuan (originally 0.48 yuan/0.59 yuan) and added the 2015 forecast to 0.59 yuan. The current stock price corresponds to 2013/2014/2015 PE and is 10 times 15/12/10, maintaining an “gain” rating and a target price of 6.8 yuan.