Xinmin Technology: Industry Classification Changed From "Textile" To "Chemical Fiber".

We believe that the main business of Xinmin technology is polyester filament business, whether it is income or not.

Accounted for more than 60% of the total, and the company's non-public offering of raising funds is a polyester filament project. After the project was completed in 2011, according to our expectation, the total income of the company's polyester filament will account for more than 80% of the company's total revenue. The industry category is adjusted from "textile" to "chemical fiber", which reflects the fact that the main business of the company is pformed from fabric to polyester filament.

Xinmin technology, formerly a manufacturer of silk fabrics, has 48 years of experience in silk production. It has long been in the top ten of China's silk industry. The company has a profound understanding of the development trend of silk and textile industry. The pformation of business into polyester filament is the key to the future development of the company.

Investment suggestion: under the condition of tight supply of cotton, the polyester filament industry is expected to maintain high prosperity, the demand for polyester filament is strong, and the capacity expansion of the industry is limited by the supply of equipment. After the successful pformation of Xinmin technology into polyester filament, the product differential rate is high, and the future expansion of production will be clear, which will fully benefit the prosperity of the polyester industry.

We expect the company's 2010-2011 years EPS to be 0.37 yuan and 0.92 yuan respectively, and dynamic PE are 37 times and 15 times respectively. In 2011, dynamic PE is the lowest among the A share listed companies in the polyester industry. The company value is still underestimated by the market. We continue to recommend the company as the first choice to invest in the polyester industry.

(Haitong Securities)