Tianjin Saixiang Technology Co., Ltd. was founded in 1989. After more than 20 years of development, the company has become a high-tech enterprise integrating scientific research, development, production and trade. It develops and manufactures various types of radial tire production equipment for high-grade opto-mechatronic integrated engineering, load, passenger, aviation, etc., and develops industrial control software and tire enterprise management network information systems for users. The company's technology center became a national enterprise technology center, and postdoctoral research workstations were established. In 2007, the company's “Giant Engineering Radial Tire Complete Equipment” won the first prize of the National Science and Technology Progress Award. The company's main economic indicators currently rank first in the rubber machine industry in the country, and its output value ranks fifth in the world's rubber machinery industry.

Considering that the price of natural rubber is currently low, the overall gross profit level of tire companies is high, and the company's future revenue and profit will maintain relatively rapid growth. According to the valuation model we obtained, it is estimated that in 2014-2016, the company's operating income will maintain a growth rate of about 30%, achieving earnings of 0.29 yuan, 0.35 yuan, and 0.41 yuan per share, with a dynamic price-earnings ratio of 40.03 times. We think the current stock price is far from reflecting the company's basic situation. As the company's gross margin increases further, the flexibility of the company's performance will be fully unleashed. We are optimistic about the company's future development and give the company's stock price an “increase in holdings” rating.

Risks:

Increased competition in the tire manufacturing industry has led to lower gross margins; uncertainty brought about by large fluctuations in raw material costs.