With the smooth implementation of the industrial layout, the successful diversification of the product series, the relatively balanced proportion of all kinds of business income, and more diversified sources of income, it is expected that future profits will have a basis for growth: in 2021, the company will achieve a total income of 198 million yuan,-26.19% compared with the same period last year; achieve a net profit of 30 million yuan,-69.03% compared with the same period last year.

The income and net profit of homing decreased significantly in 2021, mainly due to the influence of the socio-economic environment, the epidemic situation, the change of ordering plan, and the increase in R & D, management and other expenses. The company aims at business layout, laying a solid foundation and improving core competitiveness in 2021. It is expected that the company's future operating income and return net profit will increase steadily, which is mainly related to macro policy stimulus, positive industry information, smooth implementation of industrial layout, and the possible completion of the acquisition of Cadino Technology in the future. Compared with 2020, the number of products operated in 2021 increased, including nuclear radiation monitoring equipment and biological detection equipment, accounting for 20.00% and 10.80% of business income, respectively. As a result, the share of revenue from hydraulic transmission and control systems, which is the main business, has decreased significantly. In 2022, the proportion of H1 nuclear radiation detection equipment business in the company's revenue continues to rise, and the company's business classification is more detailed, and continues to diversify its products. Therefore, after the industrial layout, the company's main business income source is no longer a single washing equipment core components supporting hydraulic transmission and control system-based, indeed achieved the diversification of product series. As a result, we estimate that the company's 2022 operating income is 248 million yuan, + 25.00% compared with the same period last year, and the net profit is 40 million yuan, + 27.60% compared with the same period last year.

High barriers to industry access and core technology, years of deep ploughing to consolidate the foundation, enhance the core technological advantages, and continue to promote the construction of fund-raising bases: the nuclear and biochemical industry has urgent needs, high market access requirements and high technical barriers. Jieqiang equipment has relevant access qualifications, is the leading enterprise in the equipment industry, with high core technical barriers and a wide range of applications, products are used in the military, environmental protection, medical and nuclear industries and other upstream and downstream systems, scientific research institutes and other fields. Since its establishment, R & D investment has increased year by year, and R & D expenses account for a high proportion. A number of subsidiaries acquired in recent years have excellent R & D teams and R & D centers, making use of their mature technology and strong R & D capabilities in the field of nuclear and biological testing to strengthen the company's core technological advantages. In addition, the company's investment base has been gradually completed, including R & D centers and production bases.

In 2021, the company started the construction of the military-civilian dual-use manufacturing center (Mianyang) base project. as of June 30, 2022, the first phase of the Jieqiang equipment dual-use manufacturing center (Mianyang) project has been completed for the record. Rayes, Gertrude and Jiuqiang Intelligence will be stationed one after another. With the gradual completion of the production site and about to be put into use, the company's production capacity may be guaranteed, and the future production scale and revenue are expected to increase.

The development of nuclear protection and nuclear monitoring equipment has been accelerated during the 14th five-year Plan, and the company has acquired a number of subsidiaries and made use of the advantages of the subsidiaries to actively lay out the whole industrial chain: the policy of the 14th five-year Plan has been promoted, and the development of the military industry has been strengthened. the company's military product orders account for a proportion, and the scale of orders is expected to increase in the future. The company acquires a number of subsidiaries related to the holding industry, continues to layout the industrial chain, and broadens the product range and sources of income.

In 2021, Jieqiang equipment successively acquired Beijing Hongjin Jiuan Biotechnology Co., Ltd. and Shanghai Renji Instruments Co., Ltd., with the help of the two companies' product, technology and other advantages in their respective fields and market channel resources. increase business types and sources of income. Moreover, there are no military industrial groups or local military industrial enterprises mainly equipped with biosafety support equipment in China, and this field is a vacuum zone for the layout of military industrial enterprises. Jieqiang equipment acquires Beijing Hongjin Jiuan Biotechnology Co., Ltd., making use of its advantages and resources in various aspects, so that it has more room for competition in this field.

Actively carry out capital operation to help the company's future development: on May 12, 2022, the company approved the proposed acquisition of Cardino Technology, which is a key step for the company to strengthen its strategic layout in the field of nuclear radiation monitoring. Cardino Technology is a private enterprise engaged in R & D, production, sales, after-sales service, technical promotion, maintenance and repair of nuclear radiation measuring instruments, with a business income of 292 million yuan and a net profit of 65.5571 million yuan in 2021. The Cadino technology product series is rich, the core technology is mature, and the downstream customers cover civilian enterprises in addition to the military, which will help Jie Qiang equipment to improve the competitiveness of R & D, production and other aspects, improve the product sequence, and expand the civilian product market. as a result, the company's nuclear testing business is expected to further expand and cultivate new profit growth points of the company. Combined with the operating situation, financial data and development prospects of Cadino Technology, we predict that if the company successfully acquires Cadino Technology in 2023, the company's net profit from 2023 to 2024 will be 72 million yuan and 95 million yuan respectively.

Investment suggestions: at the macro level, it is expected that the national defense budget and the development of the military industry will improve during the 14th five-year Plan period, and the strengthening of the nuclear, chemical and biological safety industry will also increase the demand for nuclear, chemical and biological safety equipment, and there will be a broad market demand for the company's major businesses in the future. At the company level, as a leading enterprise in the industry, the company has rich technical reserves, the industrial layout has been gradually improved in the past two years, the product range is rich, and the places needed for productivity have been gradually built. Generally speaking, the core competitiveness of the company has been strengthened, and the profitability is expected to be significantly improved in the future. In addition, in May 2022, Jieqiang equipment passed the preliminary plan for the acquisition of Cardino Technology Co., Ltd., the company is doing well, its income is relatively stable, and its net profit has increased significantly. The future development of Jieqiang equipment can be optimized in terms of technology, product lines and sales channels. After the successful completion of the acquisition of Cardino, Jieqiang equipment's operating income and net profit will be very much higher than before the acquisition, so it will be upgraded to "buy" rating for the first time. If asset restructuring is not taken into account, the company's net return profit from 2022 to 2024 is expected to be 40 million yuan, 53 million yuan and 74 million yuan respectively, EPS is 0.40,0.53,0.62 yuan respectively, and PE is 92 times, 69 times and 59 times respectively. If the company successfully completes the acquisition of Cardino in 2023, the company's net profit from 2023 to 2024 is expected to be 72 million yuan and 95 million yuan respectively.

Risk hints: the risk of policy change in the nuclear industry; the risk of iterative technology renewal and less than expected R & D; the risk of technical brain drain; the risk of intensified market competition; the risk of seasonal fluctuations in business operations; costs increase statistical errors, forecast parameters, assumptions can not wait for the expected risk; cost increases risk; the risk of the acquisition of Cardino can not be successfully completed.