The winter of the industry is not over: under the dual influence of the European debt crisis and overcapacity, domestic photovoltaic small and medium-sized enterprises have stopped production seriously, and the decline in capacity utilization of large enterprises is also very obvious. the large capacity expansion since the second half of last year has also overdrawn the demand for equipment to a certain extent. The expansion of large factories slowed in the second half of this year, while the expansion of small factories stagnated, so the company's new orders fell in the second half of the year compared with the same period last year. In 2011, the main products are expected to ship 650-700 single crystal furnaces and 40-50 polycrystal furnaces. Due to the uncertainty of the European debt crisis, the pain of the photovoltaic industry will continue into next year, then the industry-wide capital expenditure will decline, and the demand for equipment will continue to be affected.

One is to get the money back and the other is to be close to the rich: under the background of the industry recession, the customer has delayed the delivery of goods, but there is no breach of contract, so the company pays more attention to the money back, and the customer's payment also tends to be strict. This year's shipments are probably very important in the future demand for tycoons, and Jinggong technology is to rely on Poly Xiexin to break out in one fell swoop. The company will also make efforts to the supply system of large factories in the future, and has made some progress in negotiations with several potential major customers.

Graphite thermal field is the highlight of this year: graphite thermal field is an important consumable material in crystal silicon growth furnace, and the demand for replacement exists all the time. The company acquired a 68 per cent stake in Shanghai Jeames last year, with a domestic market share of about 15 per cent, good profitability and a high gross profit margin. The company also owns 65% of the light source crucible. Due to the increasing number of single crystal furnaces in the market, the demand for replacement of consumables in the next few years and the change in service mode will become an important growth point of the company's profits.

Follow-up outbreaks look at cutting machines and LED equipment: the company's multi-wire cutting machine products are in the forefront of technology in China, shipped last year and this year, while other domestic manufacturers basically use their own products. The company is also developing large models and is expected to produce a prototype by the end of the year. In terms of LED equipment, the sapphire furnace has been shipped in small quantities for trial use, and the process is still being improved. It is expected to be completed by the end of the year, with a maximum feed volume of about 85kg, and in line with the process to turn-key engineering situation to downstream customers. In addition, the company established a joint venture with Hong Kong Huasheng Optoelectronics to research and develop MOCVD equipment and technology. at present, Germany's Aixtron company and the United States Veeco company monopolize the market. The core team has strong R & D strength. Dr. Chen Aihua, the main technical leader, has worked in Applied Materials Inc and China Micro Corporation with rich R & D experience. The company is very confident about the technical level of this product, and the price of a single unit may be higher than that of existing foreign products in the future. At present, the first R & D prototype has been assembled, and the installation and commissioning is expected to be completed in January.

Profit forecast and investment advice: we expect the company's EPS from 2011 to 2013 to be 0.68,0.83 and 1.21 yuan respectively, with a corresponding price-to-earnings ratio of 27.4x, 22.5x and 15.4x respectively.

Risk hint: the continued malaise of the photovoltaic industry has led to a decline in demand for equipment; the surpassing of technology has led to the replacement of products. The company mainly focuses on new products, the volume will be around 2013, the progress of research and development and the degree of acceptance by customers have a certain technical risk.