Investment point 1: subsidiary Nanjing Chengzhi is the main contribution to the company's profits, and its industrial park operation mode is replicable. Chengzhi shares are expected to replicate in other industrial parks because of its strong shareholder background and good reputation.

Investment point 2: the feedstock methanol cycle is downward, while the polypropylene cycle is superimposed with the impact of the plastic ban, which leads to the gradual recovery of polypropylene. The company's MTO plant is expected to be put into production in 2019, when profitability will be greatly improved.

Investment point 3: the ratio of natural gas to coal begins to expand, and the company purchases coal and sells syngas, which is expected to benefit from the expansion of the ratio of coal to natural gas.

Investment suggestion: the company is a pioneer in the field of MTO with rich operational experience. With the commissioning of 600000 tons of MTO units, the company's profitability will be significantly enhanced. We predict that the annual EPS in 18-19-20 will be 0.68,0.82 and 1.05 yuan respectively, covering for the first time and giving a "recommended" rating.

Risk hint: MTO plant put into operation less than expected risk, methanol plant put into operation less than expected risk, arbitration compensation risk, goodwill impairment risk.