The company is a leading process automation instrument supplier and corresponding project service provider in China. The main products include electric actuators, flow meters, control valves, signal conditioning instruments and other instruments, there are hundreds of models and types, covering the core links of the industrial automation system. The company's products are widely used in power, petrochemical, iron and steel, metallurgy, cement, building materials and other national pillar industries.

Government policies strongly support the development of the industry. As industrial automation is one of the core contents of the development strategy of advanced manufacturing industry and national major equipment manufacturing industry, the relevant national policies have attached great importance to it. In recent years, the state has successively issued a series of important policies, such as the outline of the National medium-and long-term Science and Technology Development Plan (2006-2020), the Guide to giving priority to the Development of key areas of High-tech industrialization (2007), the guidance Catalog for Industrial structure Adjustment (2005), the Electronic Information Industry Adjustment and Revitalization Plan (2009), and the equipment Manufacturing Industry Adjustment and Revitalization Plan. Relevant policies have proposed to speed up the development of industrial automation control systems and instrumentation industry, in order to promote the combination of information technology and traditional industries, and enhance the level of industrial automation and intelligence.

The market capacity of the industrial automation instrument industry is huge, and the company's products have a broad space for development. According to statistics, the total output value of China's industrial automation control system manufacturing industry (including industrial automation instrument industry) in 2009 is 112.623 billion yuan, while the company's sales revenue in 2009 is only 136 million yuan. The annual sales income of foreign cross-industry integrated enterprise groups, such as Siemens and ABB, reaches billions of dollars, while the annual sales income of large foreign professional companies, such as Rotok of the United Kingdom and Vega of Germany, also amounts to hundreds of millions of dollars. Compared with the global industry leaders, the company is still on the small side. As the company is in a fast-growing domestic market, China's industrial upgrading and information development is the main theme of industrial development in the future, and the future market space is huge.

Independent mode + international cooperation mode two competitive business models. Under the independent mode, the company develops independently, purchases independently, produces independently and sells independently with its own trademark; under the international cooperation mode, the partners selected by the company are basically the leaders in a certain segment of the instrumentation industry, and the company cooperates with partners in R & D, independent procurement, independent production, and uses the partner's trademark or its own trademark to sell internationally. There are obvious differences in the characteristics and application fields between the company's independent products and international cooperative products, which can achieve differentiated sales. Through the international cooperation model, the company can quickly intervene in the field of research and development of high-end products, and master the core technology of cooperative products on the basis of digestion and absorption. at the same time, international cooperative products provide an important source of income and profits for the company's independent research and development to provide continuous financial support. In addition, it is expected that in the future, with the help of partners, we will sell our products to overseas markets.

The company's comprehensive competitive advantage is outstanding. The company's comprehensive competitive advantage is mainly reflected in management advantage, R & D advantage, sales advantage, cost advantage and business model advantage. Management advantage mainly means that after long-term development, the company has built a technical core management team with international vision and experience of international cooperation, and learned to use international standards to carry out research and development, production and management company. it has laid a good foundation for the future development of the international market. In addition, ERP/CRM and other management system software was introduced as early as 2002, and informationization is in the forefront of the industry. The company has hired well-known management consultants at home and abroad to help establish the company's management system, which runs well and improves the management level. R & D advantage means that the company has established an IPD (integrated product research and development) R & D management system, forming an efficient R & D management model that is market-oriented and customer-oriented. The sales advantage mainly means that the company has established a sales system dominated by distribution and supplemented by direct sales, has a professional marketing and customer service team of 120 people, has set up 21 offices in the mainland, and has built a sales network covering the whole country. it has become one of the companies with the most sound marketing system and the widest marketing network in the industry. Cost advantage is that in the process of international cooperation, the company continues to increase the proportion of local production and reduce production and procurement costs, so that the company's main products are basically equivalent to the international advanced level in technology. the product cost is lower than that of foreign competitors, and the competitive advantage is outstanding.

The fund-raising project has a good market prospect. The funds raised by the company's listing are mainly invested in "Intelligent instrument R & D and production expansion Project", "Intelligent Electric Actuator R & D and industrialization Project", "Flowmeter R & D and industrialization Project" and "other working capital projects related to the main business".

Through the construction of four major projects, the technical level and independent innovation capability of the company can be enhanced; the variety and range of products can be increased, and the application field of products can be broadened; the cooperation with foreign partners can be deepened to enhance the company's status in the future cooperation process; to improve product quality and reduce production costs; and to enhance the coordination ability of industrial chain. Through listing, we can also consolidate and expand the brand influence of the company.

The total investment of the four major projects is 95.3124 million yuan, of which the net value of equipment used is 850000 yuan. The total investment of intelligent instrument R & D and production expansion project is 25.3897 million yuan, the construction period is 3 years, the income of reaching production is expected to be 45.21 million yuan, and the net profit is 10.0451 million yuan; the total investment of intelligent electric actuator R & D and industrialization project is 41.1473 million yuan, and the construction period is 2 years. It is estimated that the sales income will reach 860 million yuan and the net profit will be 13.7081 million yuan. The total investment of the Flowmeter R & D and industrialization project is 28.7754 million yuan, the construction period is 2 years, and the sales income is expected to reach 61.5 million yuan, with a net profit of 11.4229 million yuan. It is expected that after reaching production, the fund-raising project will achieve a total sales income of 147.8573 million yuan and a net profit of 35.1761 million yuan.

The reasonable valuation range of the company is 19.25-22.00 yuan. It is estimated that the company's EPS from 2010 to 2012 will be 0.55,0.72 and 0.92 yuan respectively, and the compound growth rate of income and profit in the next three years will be 26.10% and 35.45% respectively. The average forecast PE of the machinery industry companies listed on the gem on August 12, 2010 is 43.16 times. Considering the company's business characteristics, we think that the reasonable PE of the IPO price of the company is 40 times that of 35m, and the corresponding reasonable value range is 19.25-22.00 yuan.