Report Summary: A leading domestic tempered glass equipment company, created the “two firsts” in the industry, and Mr. Gao Xueming, the founder of the company in 1994, successfully developed the first horizontal roller type tempered glass production line; in December 2007, the company also successfully developed the first offline low-emission (LOW-E) coated glass production equipment with independent intellectual property rights in China. After more than ten years of development, the company has become the largest manufacturer of tempering equipment in China, with a market share of over 50%; at present, the company's offline low-radiation coated glass production equipment has gradually been marketed and scaled up; at the same time, the company began developing TCO coated glass equipment in 2009, and has now entered the commissioning stage. Technical resources and brand advantages provide the company with strong backing and support. It has been in a leading position in the domestic industry for many years. It has developed 10 major series, more than 150 technologies, and more than 100 specification products. It has obtained 4 invention patents, 73 utility model patents, and 1 design patent. In addition, 13 invention patents and 3 utility model patents have been accepted. With strong technical advantages, the company marketed brands through bidding for various difficult glass engineering projects. The National Grand Theatre, Bird's Nest and Water Cube, and the Shanghai World Expo all showcased the company's high level of glass technology. The upgrading of the glass industry is driving the upgrading of the equipment manufacturing industry. With economic development, simple float glass can no longer meet market needs, and glass products are increasingly evolving into high-value-added Low-E coated glass, TCO coated glass, etc. However, due to the poor manufacturing process of domestic glass products, the production of coating equipment is now basically in the hands of a few foreign companies with advanced technology, which places a heavy burden on domestic glass manufacturers due to its high cost. Therefore, breaking through foreign technology monopolies and promoting industrial upgrading of the glass industry has become a top priority for glass equipment manufacturers in China. The fund-raising project focuses on product upgrade. The capital raised by the company is mainly used for the SM-NG-X energy-saving glass tempering unit technology transformation project and the NGC-X low radiation coated glass unit industrialization project, with the intention of expanding the production capacity of low radiation coated glass equipment. Investment suggestions We have been optimistic about the development of the company's coated glass production equipment for a long time, but due to the recent uncertainty of photovoltaic glass equipment production and the company's high valuation, we forecast EPS of 0.45 yuan, 0.63 yuan, and 0.87 yuan for 2011-2013, giving a “neutral” rating. The target price is 12.6 yuan, corresponding to 12 years EPS and 20 times PE. Risk warning The company's main risks stem from: competitors quickly mastered the coating equipment manufacturing process and competed with the company; export risks caused by international factors; and the failure to complete the fund-raising plan as scheduled.