The new direction of development has been explored for several years, and the development of Hongxing is about to usher in a historic development opportunity. We judge that with the promotion of the new power car, MnO2 is expected to become the company's "engine" business.

The company's comparative advantage in the manganese industry lies in the complete industrial chain and the domestic leading technology level.

There is reason to believe that its technological advantages in primary battery EMD will continue to secondary battery (lithium manganate, ternary material) EMD, thus becoming an obvious beneficiary of the rise of the new power vehicle industry.

CRT is gradually replaced by liquid crystal panels, and the demand for traditional barium salts and strontium salts is declining, but the company's differentiated products strontium nitrate and strontium chloride open up new applications of traditional products in LCD and other new applications, smoothing the decline of traditional products. The company's strontium chloride is an exclusive global production, and we believe that its significant cost-effective advantage is expected to lead to a gradual replacement of strontium nitrate (resulting in cost reduction or revenue increase).

2008 Annual report: "the development idea of low-cost and intensive manganese salt for walking manganese ore-electrolytic manganese dioxide / manganese sulfate-lithium manganate secondary battery has been preliminarily determined." The company's existing barium salt, strontium salt, electrolytic MnO2 production technology and product development direction represent the industry trend, reflecting a higher level of management and technology, we are optimistic about its future development prospects.

The rating is "overweight" for the first time. It is estimated that the total value of all the assets of the company is 12.88 yuan per share, which belongs to the type with high PE temporarily but high implied asset value. We believe that the current stock price does not fully reflect the value of assets, and the important investment attraction lies in the expectation that the development of emerging industries will bring historic opportunities to the company.