New market development of the leading refractories

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Ruitai Technology: the new market development of glass kiln refractories is effective

(1) the leader of melting and casting refractories for medium and high-grade glass kilns. The company has inherited China National Building Materials Institute 2 The technical force of the Research Institute of waste plastic crushing fire materials is the only enterprise in China that owns the patents and independent intellectual property rights of fused cast alumina products and can produce on a large scale. It has built the largest production base of fused cast refractories in China. Its main products, fused cast zirconia corundum and fused cast aluminum oxide, are mainly oriented to the medium and high-end market. In the field of medium and high-end fused cast refractories, the company, together with Zibo xunizi Beijing Xipu (both Chinese and foreign joint ventures) three companies with serious wait-and-see sentiment in the market together account for 80%-90% of the medium and high-grade cast refractory market, and have strong market control

(2) the market development of refractories for cement kilns will be the driving force for the company's subsequent growth. Since its listing, the company mainly focuses on the refractory market in the glass industry. However, in the past two years, the company has sought strategic transformation and gradually expanded to the refractory market in the cement industry, with initial results. We believe that due to the state's restrictions on the capacity expansion of glass, cement and other industries with excess capacity, the demand for refractories for new production lines will be greatly reduced next year, and the company's income growth of glass refractories will face the problem of deceleration

however, considering the substantial growth of the company's cement refractory production capacity, as well as the company's strong technical and brand advantages and market development ability, we believe that the company's revenue and profit will still maintain a stable and rapid growth in the next two years

(3) strong shareholder background provides strong support for the company's business. CSCEC (3.43, 0.00, 0.00%), the major shareholder of the company, is the largest comprehensive research institution and technology development center in the professional field of building materials and inorganic non-metallic new materials in China. Most of the refractory technology in the domestic building materials industry originates here, and the major shareholder has strong technical strength and reserves. China National Building Materials Group, the actual controller of the company, is a large central building materials enterprise with a huge cement production capacity of hundreds of millions of tons, which provides strong support for the company's subsequent cement refractory market development

it is predicted that the annual earnings per share of the company will be 0 respectively. 43 yuan, 0. 61 yuan and 0. 80 yuan, according to the closing price on September 16, the corresponding annual dynamic P/E ratio is 36. 6 times, 25. 8 times and 19. 7 times. According to Juyuan data, the average dynamic P/E ratio of the refractory industry is about 35 times in 2010 and 25 times in 2011. We believe that although the demand for refractories in the glass industry will decrease next year, considering the strong technical and brand advantages of the company, the future market development of cement kiln refractories will largely make up for the adverse impact of the slowdown in the demand for refractories in the glass industry and realize the stable growth of income and profits

we believe that we can give the company an appropriate valuation premium. At 40 times PE valuation in 2010 and 30 times PE valuation in 2011, the company's reasonable value is 17.. 3 yuan, which is rated as "overweight" for the first time

decrease of 8.5%%

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