Recently, we visited Fushun Hi-Tech, the company Chuangyuan Technology is planning to acquire, exchanged views with Fushun Hi-Tech leaders, and visited the production process of porcelain vases. Acquisition of Fushun Hi-Tech: Chuangyuan Technology plans to issue 46 million additional shares (including 46 million shares) and raise no more than 346.236 million yuan. It is intended to be used to acquire 43% of Fushun Hi-Tech's shares and increase its capital. After the acquisition and capital increase is completed, the company will hold 51% of Fushun Hi-Tech's shares. The issue price was not less than 8.11 yuan/share, and the majority shareholders of Chuangyuan Technology subscribed to 33.7%, maintaining the previous holding ratio. Currently, the additional issuance project has been approved by the Securities Regulatory Commission. Fushun Hi-Tech has great potential for growth: Fushun Hi-Tech is a large private manufacturing enterprise specializing in the production of high-voltage and ultra-high voltage porcelain insulators. 70% of the company's products are supplied by Ahaibu, ABB, and Siemens. Integrated circuit breaker porcelain sleeve molding technology (height 2.5m-2.6m), ultra-high strength electric porcelain patented formula, good equipment, good company competitiveness. The company has passed ISO9000-14000 certification. The third phase of the project is expected to be put into operation in March. It can produce million-volt products. It has the largest domestic production capacity. It is a high-tech enterprise, a provincial technology center, and the test hall of the R&D test center is 37 meters high, and the testing level is world-class. The company will supply 550 kV products to the World Expo project in 10 years. The output value of the third phase of the project will reach 500 million yuan after completion, and the output value of the fourth phase will reach 1 billion yuan after completion. The fourth and fifth phases of the project are expected to be put into operation in October this year. The market capacity of porcelain circuit breakers is about 4 to 5 billion yuan, and the company's Phase III and Phase IV projects have market space. The electric porcelain business became the company's largest business: the electric porcelain insulators mainly produced by Suzhou Electric Porcelain, the holding subsidiary of the company before the acquisition, were mainly rod-shaped electric porcelain insulators, and Fushun Hi-Tech's main electric porcelain insulators were mainly jack-shaped electric porcelain insulators. After the acquisition of Fushun Hi-Tech, it is possible to complement the advantages of Suzhou Electric Porcelain in terms of resources and business, exert synergy effects, accelerate product upgrades and market expansion, consolidate and enhance the company's competitive position in the domestic electric porcelain industry, achieve professional development of the enterprise, continue to optimize the product structure, and maintain the leading level of the company's various products in the porcelain insulator industry. After the acquisition is completed, electric porcelain insulators will account for the largest share of the company's main business. Profit forecast and investment rating: We expect Fushun Hi-Tech to achieve revenue of 420 million yuan and net profit of 100 million yuan in 10 years; in 2011, revenue of 800 million yuan and net profit of 200 million yuan. The company's original business escaped the impact of the financial crisis in the fourth quarter of 2009. We predicted that the company's original business had a 10-year profit of 75 million yuan to 80 million yuan, and a 1-year profit of 90 million yuan. In addition to Fushun Hi-Tech's profit, the 2010 EPS was 0.447 yuan - 0.464 yuan, and the 1-year EPS was 0.667 yuan. The valuation range was 13.4-13.92 yuan. For the first time, an “Accumulation - A” investment rating was given.