In the communication + semiconductor equipment, CPV, LED three major product lines, the company has a core competitive advantage. First, the core strengths of the company's communications and semiconductor equipment precision metal manufacturing sector are manufacturing expertise and rapid response capabilities. The growth factors are the growth of downstream industries and the transfer of high-end precision metal manufacturing in developed countries to China. Secondly, the company's solar energy business (CPV) is also a manufacturing outsourcing model. The core advantage lies in the customer: the company is the world's best CPV system integrator - Solfocus is the only supplier of mass production, and the growth factor is the high growth of the CPV industry. Thirdly, the core advantage of the company's LED business lies in the global advanced packaging technology patents, which can fully enjoy the premium brought by unique technology and the growth opportunities brought by the outbreak of the downstream semiconductor lighting market.

It is worth mentioning that CPV and LED belong to the new energy strategy emerging industry, and the outbreak is expected to grow. With the arrival of the global “green limit” of 8-10 billion incandescent lamps in 2012, the global LED industry has entered a golden period of development – ​​a decade is expected to grow 20 times. CPV is a third-generation solar power generation system with an annual installed capacity of less than 30MW. In the future, the technological advantages will be transformed into market space, which will bring about opportunities for explosion.

The EPS of the company is expected to be 0.82, 1.86 and 2.61 yuan respectively in 2010-2012. The reasonable valuation range is 68-75 yuan, corresponding to the dynamic P/E ratio of 82.9-91.5 times in 2010, corresponding to the dynamic P/E ratio of 36.6-40.3 times in 2011, corresponding to the price-earnings ratio of 26.1-28.7 times in 2012. Maintain a “strong” investment rating.

(Ping An Securities)