Introduction to this report:

The company's independent research and development continues to expand the product line. Electron microscopy targets high-end overseas brands and can be applied to semiconductor failure analysis.

At the same time, aerospace development is driving increased demand for third-party testing, and the company is expected to benefit as a leading metal inspection leader.

Key points of investment:

It was covered for the first time, and a “increase in holdings” rating was given. We forecast that the company's net profit for 2023-2025 will be 1.34/172/194 million yuan, respectively, and the corresponding EPS will be 0.35/0.45/0.51 yuan, respectively. Considering that 1) the company is an authoritative third-party testing agency for metal materials and has been recognized by downstream leaders; 2) strengthening basic research drives the acceleration of localization of analytical instruments, and the company's analytical instrument category continues to expand; 3) self-developed nanoscale electron microscopes are positioned at the middle and high-end, which can be applied to semiconductor device failure analysis, high temperature alloy materials, etc. The company was given a target price of 16.62 yuan, 33% room for improvement, and a “increase in holdings” rating.

Strengthen the process of localization of supporting analytical instruments for basic research and catalysis, and the company independently develops and conquers high-end products such as electron microscopes, mass spectrometers, and spectrometers. China's basic research has the problem of selecting topics from overseas, importing overseas scientific instruments, and publishing in overseas journals. Strengthening basic research catalyzes the increase in the localization rate of supporting scientific instruments. The company undertakes major national issues, takes the lead in formulating international standards for ICP mass spectrometers, and independently develops and broadens scientific instruments such as electron microscopes and mass spectrometers into eight categories and more than 60 types.

The company's electron microscope resolution import substitution has exceeded expectations. It can benchmark high-end overseas products and provide failure analysis solutions for high-end materials and semiconductors. The nanoscale electron microscope has a magnification of one million times and can be used in semiconductor device failure analysis and high-end materials. The company has developed high-resolution scanning electron microscope products to target high-end overseas products. The company's electron microscope has won the bid for the procurement project of the Institute of Biophysics of the Chinese Academy of Sciences.

Aerospace development is driving up demand for third-party testing of superalloys, and the company is expected to benefit from being an authoritative metal testing agency. 1) Superalloys are key materials for aerospace engines, and upgrades in the aerospace industry, such as airworthiness certification for large domestic aircraft, are expected to increase demand for third-party testing of supporting superalloys. 2) The metal detection barrier is high, and the company has been recognized by leading engine companies and research institutes.

Risk warning: risk of technology iteration, risk of subsidy policy changes.