The company is the main supplier of injection production equipment in China. The company is the main supplier of injection production equipment in China, and its products are mainly sold to major pharmaceutical companies for the production of large infusion bottles and small water needles for all kinds of clinical use. Eight of the top ten infusion production enterprises in China are company customers, and the domestic market share of the company's large infusion injection production equipment is in the forefront of the country. The company has invested about 5% of its income in R & D over the years and has obtained 26 invention patents. Continuous technological innovation has continuously enriched the company's product line and promoted the import substitution of domestic pharmaceutical equipment.

The new version of GMP certification has led to a substantial increase in demand in the past two years. The new version of GMP certification requires that aseptic preparation production enterprises (including injections) must pass the new version of GMP certification, the company's large infusion, small water needles are aseptic. We estimate that there are about 400 large infusion production lines and 1500 small needle production lines in China, all of which require an investment of about 2.5 billion yuan, which will create an average annual renewal demand of about 800 million yuan in the three years from 2012 to 2014. As the leading supplier of domestic injection production equipment, the company has shared the demand growth brought about by the renewal of pharmaceutical equipment.

The new business will protect the continued growth after GMP certification. At present, domestic small water needle injection is still dominated by glass ampoules, while safer plastic ampoules in developed countries have accounted for more than 70%. The company has developed production equipment to replace imported plastic ampoules and realized sales. The intelligent lamp inspection machine for automatic detection of all kinds of injection products launched by the company in 2011 has sold 18 sets that year. The aseptic blood vessel collection and blood collection needle project being implemented by the company is expected to be put into production in October 2013. after reaching production, the annual output value can be increased by about 320 million yuan. These businesses will ensure the continued growth of the company after the completion of GMP certification.

Rating and valuation. Combined with the relative valuation method and the absolute valuation method, we think that the reasonable valuation range of the company in the next 12 months is 13.3 yuan-14.0 yuan. The risk is that the GMP certification of the pharmaceutical company leads to an imbalance in annual demand, and the sales of the company's new products, such as intelligent light inspection machine, plastic ampoule production line and blood collection equipment, are lower than expected.