Tianrui: X-ray fluorescence spectrum accounts for 90% of revenue growth rate of 20%

The traditional advantage product X-ray fluorescence spectrometer contributes about 90% of the current revenue and is expected to maintain a steady growth of about 20% per year. The company's products cover many fields such as XRF, experimental analysis, medical treatment and environmental monitoring. The X-ray fluorescence spectrometer is the company’s current leading product, and its proportion in current revenue exceeds 90%; the mandatory launch of the EU RoHs directive has driven the company’s first The outbreak, the gradual strictness of global environmental protection requirements and the continuous expansion of product applications are expected to drive the steady growth of XRF products by around 20% per year.

The demand for new product environmental analysis instruments, especially heavy metal monitoring related instruments, is expected to break out during the “Twelfth Five-Year Plan” period. Experimental analysis instruments, medical instruments and environmental analysis instruments are brand new products introduced by the company, among which the demand for environmental analysis instruments is expected to erupt during the “Twelfth Five-Year Plan” period; domestic PM2.5, key industries for desulfurization and denitrification, and heavy metal pollution control related monitoring instruments are new. The increase in demand is about 2.6 billion yuan annually, of which the annual increase in demand for heavy metal monitoring instruments is about 1.375 billion yuan, accounting for more than 50%; we expect that environmental analysis instruments will gradually contribute performance from 2013, and 2013 and 2014 are expected to contribute more than 50 million and 100 million income.

The export business performed well. After the high investment in R&D and marketing, the company is about to usher in a period of high income growth. The company's export business income growth rate is higher than the domestic business income growth rate and the national average export growth rate, and in the first half of 2011, the top five customers outside China accounted for four seats; the company’s R&D cycle just passed and new products were launched on a large scale. The management fee rate is expected to gradually decrease; the marketing cycle is in progress, and the per capita business income of marketing personnel is expected to gradually increase, and marketing efficiency will gradually increase; the revenue cycle of continuous income growth is expected to start from 2013.

The reasonable value range is 25.81-29.50 yuan. We expect the company's 2012-2014 EPS to be 0.92, 1.14, and 1.55 yuan respectively; the comparable company's 2012 PE unanimously expects the PE average to be more than 35 times. Based on the company's endogenous power growth and long-term prosperity of the industry, we press 2012- The 32-fold PE interval gives the company a reasonable value range of 25.81-29.50 yuan. According to the 30-fold PE level in 2012, it gives a 6-month target price of 27.66 yuan, with a buy rating.

The main uncertainties:

(1) There is uncertainty about the intensity and progress of central and local investment in environmental protection during the 12th Five-Year Plan period;

(2) Non-electricity industry desulfurization, denitrification and heavy metal pollution monitoring is a long-term and gradual process;

(3) Industry competition may intensify.