The supply of tantalum concentrate has been tightened, and prices are facing a new round of increases. Tantalum concentrate mainly comes from Africa and Australia, but due to the financial crisis, the Australian tantalum mine has been closed since 2009. This has caused the global supply of tantalum concentrate to the African region. Currently, African mines account for nearly 50% of the world's total production. Affected by the non-conflict ore smelter project, it is expected that the supply of tantalum concentrate produced in Africa will be further controlled. On the other hand, the production cost of Australian tantalum concentrate is high, so it is expected that production will be difficult to resume this year. Therefore, overall, the shortage of tantalum concentrate supply will continue, and prices are facing a new round of rising prices. Tantalum capacitors have superior performance and are irreplaceable. Tantalum capacitors have the advantages of small size, large capacity, low leakage current, long service life, and excellent overall performance. Not only are they smaller in size, higher in capacity, and stable in function than other capacitors such as ceramics, aluminum, and film under normal conditions, but they can also work normally under many severe conditions that other capacitors cannot perform. Formally, because of its unmatched superior characteristics, there are almost no other capacitors that can replace it equally in the field of microelectronics science and surface mount technology and in high-end, high-end and high-precision electronic product systems. The tantalum industry will benefit from the trend of miniaturization and intelligence. China is facing the problem of economic transformation. Labor costs are constantly rising, and miniaturization, mechanization, automation, and intelligence are imperative. As an important electronic component product, demand for capacitors will meet the overall development trend of future motors due to their excellent performance, so they will experience rapid structural growth, and tantalum products as raw materials for capacitors will face important opportunities for rapid development. Dongfang Tantalum Industry (000962): Tantalum industry leader, other businesses will enter a harvest period. The company is one of the world's top three tantalum companies, with a production capacity of 630 tons of tantalum powder and tantalum wire. The company is the world's largest manufacturer of tantalum wire, with a global market share of 60% and a tantalum powder market share of 30%. The main products, capacitor-grade tantalum powder, and tantalum wire for capacitors rank first among their peers regardless of variety, specification, or quality. At the same time, it was announced that it will actively develop other businesses, and it is expected that it will gradually enter a harvest period. Profit forecast. As a leader in the tantalum industry, on the one hand, the company can share the dividends of rising upstream resources, and on the other hand, it is also a beneficiary of the miniaturization of tantalum capacitors. It is estimated that the company's EPS for 14-16 will be 0.07, 0.29, and 0.42 yuan, respectively, and the PE corresponding to the latest stock price will be 149, 38, and 26 times. We believe that the company has an absolute lead in the tantalum industry, and that the company is actively developing other businesses to expand the company's profits, and is about to enter a harvest period. Combining the above factors, we upgraded the company's rating to “recommended”. Risk warning. 1) Risk of tantalum price fluctuations; 2) New business development is lower than expected risk.