Convergence Technology: Continuous M&A is an industry development model

The industry market is huge and the company's business is growing steadily

In the next 2-3 years, the country will continue to increase its investment in environmental monitoring. The market size of environmental monitoring system CAGR will reach over 20%. We expect that by 2013, the total market size of environmental monitoring instrumentation will exceed 20 billion; With the rapid development of new energy industries such as biogas and bio-oil, industrial process analysis instruments will show rapid growth, and the market size CAGR will exceed 15%.

Continuous M&A is an industry development model

The company's main business income has grown steadily. The major surprise of the future is in mergers and acquisitions. From the perspective of the company's product structure, lateral acquisitions such as liquid analysis instruments and solid analysis instruments are worth looking forward to, and through mergers and acquisitions can achieve complementary channels and technologies. The company listed and issued 45 million shares, which accounted for approximately 10.11% of the total share capital after the issuance, and this is the basis for continuing M&As in the future.

Company growth potential and profit forecast

The market occupancy rate of the company's environmental monitoring system and industrial process gas analysis system is the first. From the perspective of the contract, the company holds more than 200 million contracts and has full orders in the short term. We expect the company's sales revenue for 2011-2013 to be 9.24, 12.29 and 1.656 billion yuan, with growth rates of 41.84%, 32.97% and 34.68% respectively.

The fully diluted EPS was 0.53, 0.74 and 0.96 respectively. We refer to the company's average business valuation of similar companies with the company's main business, such as Hanwei Electronics, Xianhe Environmental Protection, etc., giving the company 36 times the dynamic price-earnings ratio in 11 years, the target price of 19.12 yuan.