China Post Securities recently conducted research on Sichuan Instrument Co., Ltd. and released a research report “Industrial automation instrument leader, domestic substitution continues to advance”, giving Sichuan Instrument Co., Ltd. a buy rating.
Sichuan Instrument Co., Ltd. is a leading enterprise in the domestic industrial automatic control system device manufacturing industry with more than 60 years of experience.
The company was founded in November 1999. Its predecessor was the Sichuan Instrument General Factory, which moved to Chongqing from Shanghai, Jiangsu, Liaoning and other places in 1965. It was one of the three major instrument manufacturing bases laid out by the country in the 1960s.
After years of development, the company has built a full industrial chain system from raw materials to complete instruments and meters, forming a business structure with industrial automation instruments and devices as the core and electronic information materials and devices as important supports.
In terms of operating performance, affected by the current structural contradictions in the domestic industry, the company’s revenue and net profit attributable to the parent company will both decline in 2025.
However, the company continues to deeply explore the main markets such as chemical industry, oil and gas, metallurgy, and electricity, and actively explores new fields such as nuclear power, aerospace, shipbuilding, water conservancy and water affairs, and promotes the substitution of domestically produced high-end products.
In the first quarter of 2026, revenue will return to positive levels and operating performance will gradually stabilize.
In terms of profitability, the company’s gross profit margin will be stable in the range of 33% – 35% from 2022 to 2025, and its net profit margin will be stable in the range of 9% – 11%. It is expected to benefit from the increase in the volume of high-end products and the growth of scale effects.
In November 2025, the actual controller of the company was changed to SINOMACH.
As an important central enterprise in the machinery industry, SINOMACH has significant advantages in scientific research platforms, industrial resources, market channels, etc.; while Sichuan Instrument Co., Ltd. has 60 years of technological accumulation and a complete industrial chain layout, the two parties are expected to create synergistic effects, thus accelerating the development of Sichuan Instrument Co., Ltd.
Instrumentation is a key technical pillar that promotes national scientific and technological progress, ensures national security, and promotes industrial upgrading. It is increasingly supported and encouraged by national policies, and the development space and market boundaries are constantly expanding.
The overall revenue and profits of my country’s above-scale instrument manufacturing industry are on an upward trend.
From January to December 2025, my country’s regulated instrument manufacturing industry achieved operating income of 1,132.94 billion yuan, a year-on-year increase of 4.2%; total profits were 116.03 billion yuan, a year-on-year increase of 3.1%. This growth rate is higher than the overall level of the industry.
From January to April 2026, my country’s regulated instrument manufacturing industry achieved operating income of 325.47 billion yuan, a year-on-year increase of 5.5%; total profits were 24.380 billion yuan, a year-on-year decrease of 4.7%.
China’s industrial automation market is worth hundreds of billions.
According to RCC model predictions, China’s industrial automation market growth rate is expected to maintain an average annual growth rate of approximately 3% from 2025 to 2027, and 8% from 2028 to 2030. In 2030, my country’s industrial automation system market size will reach 351 billion yuan.
As important components of my country’s automation instrument industry, pressure transmitters, flow meters, and control valves are similar to the “senses-nerves-hands and feet” of industrial automation systems. According to RCC predictions, the market sizes of control valves, flow meters, and pressure transmitters will reach 59.9 billion yuan, 14.4 billion yuan, and 7.2 billion yuan respectively in 2027, with three-year average growth rates of 7.4%, 7.7%, and 4.7% respectively.
Compared with global leaders, Sichuan Instrument Co., Ltd. has broad room for growth.
The trillion-level market space for instrumentation has given birth to many giants. The world’s leading automation instrumentation companies include Emerson, Siemens, Honeywell, Yokogawa Electric, E+H Corporation, etc. Among them, the revenue of Emerson, Siemens, Honeywell and other companies has exceeded 100 billion yuan (including other business sectors as a whole).
On the other hand, the revenue of Sichuan Instrument Co., Ltd., the domestic automation instrument company with the largest revenue, will only be about 6.8 billion yuan in 2025. From the perspective of industry attributes alone, high-quality domestic brands such as Sichuan Instrument have large room for growth.
Compared with high-quality overseas companies, Sichuan Instruments’ per capita income is close to Yokogawa’s level and has performed well.
The complete product system, obvious channel advantages, outstanding R&D strength, and leading intelligent manufacturing have jointly built the company’s moat.
In terms of products, the company has a comprehensive product layout and complete system advantages. Each product category empowers and closely collaborates with each other, and has efficient product reinnovation capabilities and customer demand transformation capabilities.
In terms of channels, the company grasps the needs of chemical industry, oil and gas, metallurgy, electric power spare parts and technical transformation projects and some new projects, deeply cultivates core customers, achieves growth in orders in new fields such as nuclear power, aerospace, water conservancy and water affairs, and actively explores overseas markets.
In terms of research and development, in recent years, more than 40 products have achieved the company’s first set of applications in the fields of chemical industry, oil and gas, nuclear power and other fields, and more than 50 products have achieved domestic application.
In terms of manufacturing, a total of 50 smart production lines, 9 Chongqing basic-level smart factories, 3 Chongqing innovation demonstration smart factories, 1 national excellence-level smart factory, and 1 5G factory have been built.
In terms of profit forecast and valuation, the company is one of the very few comprehensive R&D and manufacturing enterprises of automated instruments and control devices in China. It has a complete product system and multi-dimensional business development. It launches product categories adapted to the characteristics of different downstream markets. It can quickly respond to the diverse and personalized needs of users and is expected to continue to benefit from the general trend of domestic substitution in various fields and products.
It is estimated that from 2026 to 2028, the company will achieve revenue of 7.072/7787/8.506 billion yuan, respectively, with year-on-year growth rates of 3.93%/10.10%/9.24% respectively; and achieve performance of 6.76, 763, and 880 million yuan respectively, with year-on-year growth rates of 5.15%/12.87%/15.35% respectively.
Selecting SUPCON Technology, Neway and Huarong as comparable companies, the company’s PE valuations from 2026 to 2028 are expected to be 13.22/11.71/10.15 respectively, maintaining a “buy” rating.
However, there are also risks such as domestic substitution progress being less than expected, and new industries and new product expansion being less than expected.
A total of 5 institutions have rated the stock in the past 90 days, and 5 have given buy ratings; the average price target of institutions in the past 90 days is 22.08.
