As a pioneer and leading enterprise in the vacuum permanent magnet switch industry, the leading company in the vacuum permanent magnet switch industry has a clear first-mover advantage: in terms of technology, the company has obtained 3 invention patents and 16 utility model patents, forming a product serialization of 40.5 kV and below, and the product performance far exceeds that of well-known foreign brands; in terms of operation performance, the company's products have been in the market for nearly 10 years and successfully used in large-scale enterprise projects such as Shougang, Baosteel, Angang Steel, Bengang, CNPC, and the five major power generation groups; in terms of market, the company's products currently dominate 12 kV and 12 kV The market share of 40.5kV permanent magnet switches is at the top. Vacuum permanent magnet switches have broad development prospects as an emerging technology. Currently, vacuum permanent magnet switches mainly cover a “wide range” of distribution and electricity usage fields of 40.5 kV and below. As an emerging technology in the industry, this product is superior to traditional spring actuator switches in terms of equipment service life, reliability, and maintenance-free, and is particularly suitable for high-end markets such as steel, chemicals, coal, and power plants. Due to its relatively scattered customer base, compared to high voltage and ultra-high voltage transmission equipment, medium voltage electrical equipment has stronger bargaining power. Furthermore, vacuum permanent magnet switches are the core components of power distribution switches. Compared with complete equipment, they have high technical barriers, short repayment cycles, and strong profitability. At this stage, permanent magnet switches are still in the market introduction period, and the number of devices accounts for about 5% of similar devices. As the absolute capacity of the switch market increases in the future and the penetration rate of permanent magnet products increases, the future development prospects are promising. Earnings forecasts expect the company to achieve earnings of 0.82, 1.14, and 1.44 yuan per share from 2011 to 2013. PE was 31 times higher in 2011, lower than the level of medium- and low-voltage complete equipment companies. We believe that the company is a core circuit breaker manufacturer and should have received a higher valuation than complete switch equipment vendors. Based on the calculation of 30 times PE in 2012, the target price is 34 yuan, giving it a “buy” rating. Risks indicate the risk of market development of permanent magnet switches; the risk of declining gross margin of the competitiveness of a single product; the risk of high concentration of equity, etc.