Industrial Securities recently released a research report said that process industry automation is one of the important scenes of industrial automation, petrochemical, chemical and other downstream industries capital expenditure is strong in recent years, is expected to maintain the intensity of related capital expenditure this year, new energy and new materials and other emerging industries rapid development, bringing the industry continued expansion, domestic leading enterprises continue to break through technology, Products continue to move in the direction of intelligence, soft and hard integration, domestic substitution, and industry integration speed up.

The main views of Industrial Securities are as follows:

Process industrial automation: 100 billion market capacity, important scenarios of industrial automation, for petrochemical, electric power, metallurgy and other important industries of the national economy.

Process industry is mainly through the raw materials mixing, separation, crushing, heating and other physical or chemical processes, so that raw materials value-added, typical industries such as petrochemical, chemical, paper and so on. Process industrial automation is mainly realized through automated instruments and DCS systems, in which automated instruments are used to collect field data, and transmit information from the production site to the control layer, or execute the instructions of the control layer. DCS system is responsible for production information analysis, fault diagnosis, production order issuance, production management and other functions. According to Huajing Industrial Research Institute, the downstream distribution of process industrial automation is more concentrated, and the three major industries of chemical, electric power and petrochemical account for more than 80%. According to the 2021 project-based industrial automation market data compiled by Rui Industry, the market size of process industrial automation is estimated to be about 172.1 billion yuan, with a compound growth rate of 4% from 2017 to 2021.

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Automation instrument: process industrial automation sensing layer, domestic alternative speed, polysilicon, lithium and other new energy industry development to bring incremental market.

Automation instruments can be divided into measuring instruments, control instruments, actuators and display instruments, measuring instruments in the pressure, flow sensors, pressure transmitters are the most widely used, according to Saidi consultants and industrial control network, in 2019, its domestic market size was 68.3/99.4/4.20 billion yuan, most domestic enterprises in the low-end market, domestic alternative space is broad. Control valve is the most widely used actuator, by integrating the valve body with the actuator and valve accessories, to achieve automatic control, similar to a robotic arm. Zhiyan Consulting data show that in 2021, China’s control valve market of nearly 40 billion yuan, in recent years, benefited from the “chemical park”, “refining and chemical integration” and dual carbon goals, petrochemical, chemical industry capital expenditure is strong, polysilicon, lithium battery materials rapid development also brings incremental space. According to the “Control Valve Information”, the sales of domestic control valve brands in 2021 accounted for 40.4%, an increase of nearly 2pct from 2020, and domestic substitution is speeding up, of which valve accessories are highly dependent on imported brands, which is the focus and difficulty of domestic substitution.

DCS system: process industrial automation control layer, 10 billion market continues to grow steadily, benefiting from the increase of intelligent manufacturing penetration, domestic substitution and industrial concentration.

DCS is an industrial automation control system based on computer control, display and communication technology, decentralized control of field devices, and centralized management, control and operation of the production process. According to Rui Industry, the scale of China’s DCS industry in 2021 will reach 11.12 billion yuan, and the compound growth rate is expected to reach 5%-6% in 2022-2027. According to Intelligent Research Consulting, the market share of domestic brands represented by Zhongkong Technology and Hollysys reached 55.72%, and foreign brands such as Emerson, Honeywell and Siemens still accounted for nearly half of the market share. Looking to the future, the industry will continue to benefit from the increase in the penetration rate of intelligent manufacturing driven by policies, as well as the policy drive of “reducing oil and increasing special” and the clustering of chemical industry parks. At the same time, leading enterprises will also fully benefit from domestic substitution, market concentration and overseas market expansion.