The market concentration of domestic vacuum switch tubes is general, and the top four enterprises account for about 45% of the market share. Xuguang shares are facing a larger market space.

2006 is the first year of the Eleventh five-year Plan. The State Grid Corporation plans to invest about 12.5 billion yuan in the improvement project of the county power grid and the western rural power grid, and the State Grid will invest 130 billion yuan in the power grid construction of the new countryside in the Eleventh five-year Plan. Vacuum switch tube will get rapid development opportunities with the implementation of these construction projects.

After the new group took ownership of Xuguang shares, its production and operation changed from extensive to refined, which was embodied in the strict control of its costs and expenses as well as the control of contract business conditions.

The quarterly report for the first quarter of 2006 showed that its operating expenses decreased by 63.2% compared with the same period in 2005, and management expenses decreased by 28.3% compared with the same period last year.

At present, the prices of major raw materials are still high, the sales prices of switches are still declining, Xuguang shares in 2006 operating pressure, the real improvement of efficiency may have to wait until 2007.

Considering the consideration of 10 get 2.5 to 3 free, the investment value range is 4.44-4.62. Give a neutral investment rating.