This report is read as follows:

The company has changed from a traditional industrial hardware manufacturer to an integrated service provider of the industrial Internet of things, the industrial Internet of things is developing rapidly, and the company's marginal incremental market space is huge.

Main points of investment:

Cover for the first time, give "overweight" rating, target price 51.60 yuan. The company has been transformed from a traditional sensor hardware manufacturer to an industrial Internet of things vertical service provider, ushering in a period of rapid growth.

It is estimated that the company's EPS from 2021 to 2023 will be 1.29,1.72 and 2.24 yuan respectively, with year-on-year growth rates of 36.86%, 33.51% and 30.23% respectively. With reference to the comparable company's average valuation of 30 times PE in 2022, the company will be given a target price of 51.60 yuan for the first time and given a "overweight" rating.

Deep accumulation in the field of sensors, a number of advantages to help the industrial Internet of things business. The company is a leading manufacturer of weighing sensors in China, with natural advantages when cutting into the industrial Internet of things track:

(1) the accumulation of hardware technology is profound, there are rich customer resources and have a more thorough understanding of the process.

(2) the ability of combining software and hardware is excellent. At present, the company has several application scenarios of industrial Internet of things products landing, supporting sensor hardware, product launch speed to maintain a high level. (3) massive data accumulation, self-built data center and artificial intelligence cloud platform are helpful to improve the quality of products and services and improve production efficiency.

Rapid development in both horizontal and vertical directions to broaden the company's business territory. Horizontal aspect: in addition to the weighing market, the weighing sensor is gradually expanding to the non-weighing market, while expanding to industrial sensor products such as flow sensors, 3D vision sensors and gas sensors according to the downstream demand. Vertically:

The company has gradually expanded from sensor hardware manufacturers to Internet of things service providers, gradually opening up the perception layer, platform layer and application layer of the Internet of things, and becoming a vertical supply service provider in the field of industrial Internet of things.

Catalyst: the development of downstream applications; the acceleration of the industrial Internet of things and the introduction of related policies.

Risk hint: business integration risk; downstream demand fluctuation risk