Instrument.com.cn News: The 2016 annual reports of domestic listed instrument companies were released in March, with 10 companies showing double-digit growth, and overall performance better than expected.

Against this backdrop, the market value performance of domestic instrument enterprises should have been excellent, but the reality was surprising. With frequent policy benefits during the "13th Five-Year Plan" period, some enterprises soared, with their market value exceeding 10 billion yuan; while others regressed, with their total market value significantly shrinking, creating a polarized scene of "half-sad, half-joy."

Based on the total market capitalization of each company as of April 17, 2017, the editors of Instrument.com.cn have compiled the latest "2017 China Instrument Company Market Value TOP10 Ranking."

Note: Techcomp (Holdings) Ltd. is a Hong Kong stock, so it is not included in the statistics.

Compared to the previous review, the latest market value ranking of domestic listed instrument companies has undergone another major reshuffle. FPI and SDL remain in the top two positions, but thanks to outstanding performances with nearly doubled market values in half a year, Environmetal and Kaiyuan Instruments have successfully entered the top five in market value. Environmetal even made it into the top three on the list, posing a strong challenge to SDL with a small margin. Among the top five on the list, all but FPI have achieved positive market value growth. In contrast, the performance of the latter five companies has been "gloomy," uniformly experiencing a decline in market value and a continuous drop in rankings.

Policy Boost: Environmental Protection Stocks Gradually Become "Leaders"

In recent years, environmental policies such as "Air Ten Articles," "Water Ten Articles," and "Soil Ten Articles" have been successively introduced, leading to a "喷 (explosive)" growth in the environmental monitoring instrument market, which has since become unstoppable. The environmental protection industry is rapidly overtaking in the curve, allowing related environmental monitoring instrument enterprises to also make a "pot full of money." If the trend in the previous two years was only dominated by FPI and SDL, then based on the latest round of rankings, FPI, SDL, Environmetal, and L&T Environmental Technology are moving forward side by side like four "locomotives," and environmental protection concept stocks are gradually becoming "leaders" in the scientific instrument industry.

The sudden emergence of Xiong'an New Area in Hebei led to Environmetal's stock, which had already deployed VOCS projects in Xiong County, experiencing multiple consecutive daily limits, with its market value quickly jumping over the 10 billion yuan "mark." And despite a slight decrease in market value, the successful signing of its first PPP project still allowed FPI to earn a net contract amount of 1.25 billion yuan in the 2016 fiscal year. A new round of policy dividends is rolling in, and on this basis, environmental monitoring instrument enterprises are expected to welcome another explosive growth.

Continuous Integration: Mergers and Acquisitions Break the "Ceiling" of Enterprise Market Value

Over the past two years, listed instrument companies such as SDL, BioHermes, and Skyray Instrument have successively initiated several "large-scale" acquisitions, which were reflected in the previous two market value rankings, with enterprise capital totals also rising steadily. Entering 2017, the acquisition cases of various listed instrument companies have settled, and the market values of many enterprises have returned to normal tracks, without sustained large-scale increases. It is worth noting that the market values of listed instrument enterprises such as BioHermes, Hanwei Electronics, and Skyray Instrument have "fallen instead of risen."

In contrast, affected by the sluggish situation in the coal industry, Kaiyuan Instruments announced its cross-industry acquisition of two major education brand enterprises after nearly four months of suspension, hoping to break the "ceiling" of performance growth. In the first quarter of 2017, two acquisition cases totaling over 1.4 billion yuan were finally finalized, which not only brought a 429.63% year-on-year increase in Kaiyuan Instruments' net profit for Q1 2017 but also created a 3.7 billion yuan increase in the company's market value. In the context of the traditional industry's stagnation, Kaiyuan Instruments' cross-industry transformation into the vocational education sector undoubtedly gave a "shot in the arm" to the scientific instrument industry, opening up a completely new development path.

Accelerated Comeback: Expecting Domestic Manufacturers to Deliver More Impressive Results

Market value, as a major indicator of the stock market, although not directly linked to enterprise revenue, is related to shareholders' wealth value and also affects the company's future financing costs and its risk resistance capability.

Affected by national macroeconomic, industry development, and company performance factors, the market value of listed enterprises changes rapidly. With the continuous strengthening of policies and regulations related to scientific instruments, domestic listed instrument enterprises are actively carrying out mergers and acquisitions. It is believed that the current "distinct" state of China's scientific instrument industry will soon be broken. The Chinese scientific instrument market is full of "business opportunities," and imported instrument enterprises regard it as a "battleground." We look forward to domestic manufacturers accelerating their comeback and delivering more impressive market value/revenue results!