Intelligent manufacturing helps improve the production efficiency of enterprises, and the growth rate of China's robot market ranks among the leading levels in the world: intelligent equipment manufacturing covers a variety of businesses, can carry out high-intensity work with excellent accuracy, and reduce the dependence on human labor in the manufacturing process. Significantly improve production efficiency and production quality. According to data from the China Business Intelligence Network, the market size of China's intelligent manufacturing equipment increased from 1.27 trillion to 2.42 trillion yuan from 2017 to 2021, with a CAGR of 17.49%. On November 23, 2022, Xin Guobin, a member of the party group and vice minister of the Ministry of Industry and Information Technology, mentioned that the scale of intelligent manufacturing equipment in China is close to 3 trillion yuan, an increase of about 23.97 percent over the same period last year. China has ranked first in the global robot density level in 2021, surpassing the United States for the first time and ranking fifth in the world, according to the International Robotics Federation. In the manufacturing industry, relative to the number of workers, the number of industrial robots in operation has reached 322 per 10,000 employees. China is by far the fastest-growing robot market in the world, with the highest annual installation and the largest robot operation inventory every year since 2016, IFR said. Combined with the company's business, for long-term development, the company has added the "Robot and Intelligent equipment production Base Project", with a total investment of 242 million yuan and a construction area of about 72808.00 square meters. Construction of the project will start in the second half of 2022. At present, all fund-raising projects are expected to be put into use in 2024, which will help the company to further focus on its main business, improve productivity and achieve large-scale economic benefits.

Nuclear power generation meets the needs of China's low-carbon transformation process, and the installed capacity is growing steadily: under the background of the continuous deepening of China's economic construction, the electricity consumption of various industries is increasing day by day, and the traditional fossil energy power generation can not fully meet the electricity needs of our country. nor in line with the green trend of modern development, nuclear power technology has become the preferred option for the development of our country. Under the background of carbon peak and carbon neutralization, the process of clean and low-carbon transformation of China's energy and power system will be further accelerated. Nuclear energy, as a clean energy with near zero emissions, will have a broader space for development. It is expected that the trend of rapid development will be maintained for a long time in the future. At present, there are 54 nuclear power transportation units and 23 units under construction in China. According to the China Nuclear Energy Industry Association, the number of nuclear power units under construction in mainland China is 23, and the installed capacity under construction is about 18741MWe. The number of nuclear power units under construction remains the leading in the world, and the nuclear power units in operation and under construction are located in China's coastal provinces. More than half of the units under construction adopt the third-generation nuclear power technology, while the Xiapu and Shidao Bay nuclear power stations adopt the fourth-generation nuclear power technology. Shidaowan No. 1 reactor was successfully connected to the grid for the first time on December 20, 2021. As of October 2022, the newly installed capacity of nuclear power generation in China is 2.28 million kilowatts. According to data from the China Federation of Electric Power Enterprises and the China Nuclear Energy Industry Association, China's nuclear power installed capacity increased from 35.81 million kilowatts to 53.29 million kilowatts between 2017 and 2021, with a CAGR of 10.45 percent; nuclear power generation increased from 248.1 billion kilowatt hours to 407.5 billion kilowatt hours, with a CAGR of 13.21 percent. On the whole, China's nuclear power has been in a state of stable development over the years, and the growth rate has slowed down slightly since 2019.

Spent fuel reprocessing is a key link of nuclear fuel cycle, and there is a broad market space: nuclear fuel cycle industry includes natural uranium exploration, mining and metallurgy, uranium conversion, uranium enrichment, fuel element, spent fuel storage, transportation, treatment and disposal, and so on. it is an important material and technical basis for the development of nuclear energy. Among them, spent fuel reprocessing is a key link in the whole nuclear fuel cycle industry chain. For a long time, China has been a depleted uranium country.

According to the data of the World Nuclear Association, the annual output of uranium in China has been much lower than the annual demand.

By 2021, the annual demand has reached 5.07 times of the annual output. Based on the current situation of difficult uranium mining and high external dependence in China, the development of nuclear fuel cycle treatment is of great significance in improving the utilization rate of uranium resources and preparing plutonium-uranium mixed fuel for thermal reactor and fast reactor, it is of great significance to enhance the strategic reserve of resources such as uranium and plutonium and ensure energy security. Spent fuel is usually produced by nuclear reactors in nuclear power plants.

With the expansion of the operation scale of nuclear power plants in China, the production of spent fuel is increasing. According to the company's prospectus, China's spent fuel production in 2020 was 1298 tons, an increase of 26.26 percent over the same period last year, and the cumulative volume reached 8718 tons, an increase of 17.48 percent over the same period last year. By 2030, spent fuel is expected to produce 2637 tons, totaling 28285 tons, with an annual compound growth rate of 7.35% and 12.49%, respectively. At present, China only has a test capacity of 50 tons per year for closed treatment of spent fuel, and the first large-scale commercial closed treatment plant of 200 tons per year is still under construction, and there is a considerable gap in the market for exploration.

The company is a leader in the field of nuclear industry products, gradually exploring the non-nuclear field: the company's nuclear industry products mainly include a series of nuclear industry robots and nuclear industry intelligent equipment. A series of robots in the nuclear industry are mostly used in chemical workshops and tail workshops in the middle and later stages of the spent fuel processing process to sample and separate chemical radioactive materials and complete the packaging of oxide products of uranium and plutonium. Nuclear industry intelligent equipment can be used in the transport of radioactive materials (such as products after cutting, dissolution, filtration and seasoning of spent fuel assemblies) in front-end workshops, tail-end workshops and other production processes. At the same time, since 2016, the company has begun to carry out technology research and development for intelligent production lines and intelligent stand-alone equipment in the field of new energy batteries, and began to obtain orders by 2019. At present, the company is carrying on the research on the modular intelligent teaching equipment system. Aiming at the vocational education needs of the intelligent production line, the modular intelligent educational equipment can be widely used in the training of students and skilled workers.

Investment suggestion: both the smart equipment manufacturing industry and the nuclear industry are the main directions of building a manufacturing power, and the scale of the industry is in the stage of stable expansion. The company's main products are nuclear industry intelligent equipment and nuclear industry series robots, with technological research and development advantages, in the case of lack of centralized suppliers in the industry, the company has obvious competitive advantage. At the same time, the company is building intelligent equipment and robot production base to increase production capacity, focus on the main business and achieve large-scale economic benefits in the future. For the first time, the coverage gives a "buy rating". It is estimated that the net profit of homing from 2022 to 2024 is 1.164pm, respectively, and the EPS is 2.65pyrm, respectively, and the corresponding PE is 3.36 times that of 38-27-21.

Risk tips: business concentration in the nuclear industry and the risk of industrial policy changes in this area; the risk of high customer concentration; the high risk of related sales; the risk of performance fluctuations caused by discontinuous orders: the seasonal risk of performance.