Annual increase of 30% in on-line environmental monitoring instruments

China's environmental monitoring equipment industry in 2005 sales revenue of about 1.58 billion yuan in 2009 reached 9.22 billion yuan, the compound annual growth rate of 40%. Orient Securities believes that the industry is expected to achieve an average annual growth rate of 30% in the future. Qilu Securities expects that by 2013, the scale of the entire environmental monitoring instrumentation market will exceed 20 billion.

The environmental monitoring industry is relatively decentralized and there are numerous production companies, while Xianhe Environmental Protection (300137) and Concentration Technology (300203) are the two companies listed in the industry first. Xianhe Environmental Protection's current market capitalization is about 640 million yuan, accounting for 1/4 of the total market value, and the main atmospheric and water quality online monitoring system; Concentrating Technology's current circulation market value exceeds 700 million yuan, accounting for 1/10 of the total market value, and the business involves industrial process analysis. Environmental monitoring systems and the Internet of Things, of which the environmental monitoring business has recently expanded, accounting for 37%, 54%, and 49% of the total revenue for the period 2008-2010.

Wang Shaojun, a former environmental protection securities representative, used the term “professional” to describe the company’s position in the field of environmental monitoring.

Congguang Technology Director Tian Kunlun said: “Environmental monitoring is only equivalent to the business of one of our subsidiaries. The ability to quickly enter different segments of industries reflects the growth of our company.”

The prospectus shows that the preemption of environmental protection in the water quality automatic monitoring system market share of 1/8, air automatic monitoring system accounted for 1/3 of the market share, Huatai United to prove its "excellent competitiveness." Concentration Technology cited the survey data of China Industrial Control Network, saying that the company ranked first in the industry in the environmental monitoring instrumentation industry with an 8.3% market share in 2009, and the United States Hash and Shenzhen Yuxing ranked second and third.

Some analysts have said that many domestic companies do environmental monitoring online, but some are actually agents of foreign products, and the high technical threshold is a big reason. In addition, because there are many indicators for environmental monitoring, the company needs to pay attention to national policies dynamically. When the monitoring standards are improved, it will be particularly important for companies to quickly develop related products, and leading companies will benefit.

From 2008 to 2010, environmental protection R&D expenditures accounted for approximately 4% of operating revenue, while Concentration Technology's share accounted for more than 10% for three years. Both companies have a number of patents and product certifications. Among the comparable projects, Concave Technology owns 7 certificates of “Environmental Product Certification in China” and 3 of the environmental protection projects. In response, Wang Shaojun, a former environmental protection representative of the securities industry, told reporters that "there may be early funding due to funding issues and R & D depends mainly on state funding, and later companies will increase investment in R&D."

In addition, due to the large number of government procurements of environmental monitoring equipment, the company’s ability to win bids during tendering is more critical. This depends on whether there is a first-mover advantage in its relationship with local governments and the degree of expansion in other provinces and cities outside the region. how is it.

The company is headquartered in Shijiazhuang, is a pioneering environmental protection company and currently has three subsidiaries. It distributes Shijiazhuang and Beijing, and its main business in North China, Central China, and Western China accounts for 85.7% of the country, of which North China accounts for more than 44%.

Concentrating Technology, which is headquartered in Hangzhou, has four holding subsidiaries in the environmental protection field, and distributes five subsidiaries in Hangzhou and Wuxi, involving other businesses, in Beijing, Hong Kong and the United States. The proportion of main income in the three regions of East China, North China, and Central China reached 74.54%, of which East China was close to 33%.

As the market is mainly managed by the government, the product homogeneity is relatively strong, and the after-sales service and cost performance are more important. In this regard, Concentration Technology has established 30 engineering service outlets and has a dedicated customer service hotline. As for environmental protection, there are also two subsidiaries that operate environmental protection equipment debugging and services.

The reporters contacted the customers of the two companies respectively. Zhoukou Environmental Monitoring Center stated that there are cooperations in the aspects of water quality, air and other aspects and the company's after-sales service “is OK”; the Shenyang City Environmental Monitoring Center stated that it is Signed a ten-year contract, "cooperation is not bad." In addition, Beijing Yudecheng Electronics Co., Ltd., one of Concentration's dealers, said in an interview with the newspaper that the amount of orders for cooperation between the two companies has increased every year, and the company’s sales of agents (foreign products) The growth is very rapid.

Ping An Securities expects to achieve revenue of RMB 234 million and RMB 328 million respectively in 2011 and 2012, and EPS of RMB 0.61 and RMB 0.81 respectively. Qilu Securities expects Concentration's 2011-2013 sales revenue in the field of environmental monitoring to reach 4.1% respectively. Billion, 530 million and 690 million yuan, earnings per share were 0.54 yuan, 0.72 yuan and 0.94 yuan.