The company's main products are inorganic barium salt, strontium salt and electrolytic manganese dioxide, which are used in CRT glass shell and primary battery respectively. We judge that these two areas have reached rock bottom and the overall business situation will gradually improve.

The decline of CRT glass shell industry has accelerated since 2009, while LCD panel shipments began to pick up year-on-year in the second quarter of 2009. We judge that the demand for short-term barium salt and strontium salt basically bottomed out. On May 14, Seg Samsung, the largest CRT color TV screen manufacturer in China, announced that the company's board of directors expected that the global color glass industry would be reduced from 53 production lines in 2008 to 29 production lines by the end of 2009, forcing the company to stop production of half of the CRT screen production line.

The application of electrolytic manganese dioxide to mercury-free alkaline manganese dioxide batteries accounts for 60-70% of the global production capacity, and the export volume of alkaline manganese dioxide batteries in China accounts for 80% of the output. At present, the situation of toy export in China is relatively severe, and the demand for electrolytic manganese dioxide is low. The traditional peak season of the toy industry (June-October every year) has arrived, the inventory of toy sellers in Europe and the United States has reached the stage that needs to be replenished, and toy orders are expected to pick up later. Cylindrical alkaline MNO _ 2 batteries fell 3.13% year on year in the first quarter of 2009. Exports of cylindrical alkaline MNO _ 2 batteries increased by 12.3% in March compared with the same period last year, while exports of button alkaline MNO _ 2 batteries fell 50% in the first quarter compared with the same period last year due to toy export trade.

We estimate that the asset value of the company is 12.88 yuan per share, which belongs to the type with high PE and high implied asset value. We believe that the current stock price does not fully reflect the value of assets, the important investment attraction is that driven by new power vehicles, MnO2 is expected to become an "engine" business. The company's existing barium salt, strontium salt, electrolytic MnO2 production technology and product development direction all represent the industry trend, reflecting the higher management and technical level, we are optimistic about its future development prospects. Maintain the "overweight" rating.