Recently, Sirui New Materials (688102), a listed company on the Science and Technology Innovation Board, disclosed a private placement announcement, with a total fundraising amount not exceeding 600 million yuan. The project with the highest planned investment (340 million yuan) for this private placement, the construction of the Sirui New Material Technology Industrial Park, is expected to achieve an annual production capacity of 30000 sets of CT tube components, 15000 sets of DR tube components, 500 sets of linear accelerator components, 3500 sets of semiconductor product components, and 30000 sets of high-voltage VI conductive system components after reaching production capacity. It is expected to achieve sales revenue of 507 million yuan in the year of production.

Among them, it is worth noting that the company will add the manufacturing of medical electronic accelerator products based on the production lines of CT tubes and DR tubes for tumor treatment. As of now, it has been verified by some customers.

01. Material giants bet on imaging core components
The project was mentioned in two large-scale investment and construction announcements released by Sirui New Materials on January 24, 2024. The announcements indicate that the company plans to use self raised funds to invest in the project for expansion, with a total investment amount of 1.33 billion yuan.

The "Sirui New Material Technology Industrial Park Construction Project" plans to invest 820 million yuan and is located at No. 60 Yuyue Road, Future Industrial City, Yanta District, Xi'an City. The project includes:
 The project aims to develop and industrialize 30000 sets of medical imaging equipment and other electrical vacuum materials and components annually, with a planned investment of 400 million yuan;
 The project aims to produce 20 million sets of optical module chip base/housing materials and components annually, with a planned investment of 320 million yuan;
 The "Tungsten Copper Alloy Materials and Parts Project" plans to invest 100 million yuan.
Among them, the "Annual Production of 30000 Sets of Medical Imaging Equipment and Other Electronic Vacuum Materials, Components Research and Industrialization Project" is one of the projects raised for investment, with a total investment of 400 million yuan. It is planned to use the raised funds to invest 340 million yuan. The implementation site is located at No. 60 Yuyue Road, Future Industrial City, Yanta District, Xi'an City, which is the existing factory area of the company. The funds raised from the project will mainly be used for factory construction and the purchase of production equipment.

Sirui New Materials was founded in 1995 and has been committed to the research and development, manufacturing, and sales of high-end application products in rail transit, power electronics, aerospace, medical imaging, and other fields. At present, the company's main products include high-strength and high conductivity copper alloy materials and products, medium and high voltage electrical contact materials and products, high-performance metal chromium powder, CT and DR tube components, new generation copper iron alloy materials, optical module chip bases, liquid rocket engine thrust chamber walls, etc.

 Rotor brazing components, connecting precision bearings and metal target disks up to 4KG
The copper alloy material of the company has the characteristics of low electron scattering and thermal scattering, which can meet the high temperature, high vacuum, and strong irradiation requirements of the working environment of medical CT and DR equipment tubes. It has a wide range of applications and huge prospects.

In 2015, Sirui New Materials began to tackle CT and DR tube components. In this field, the company's main products include metal tube shell components, rotor components, bearing sleeves, cathode parts, etc. Based on integrated technologies such as material technology, high-precision machining technology, high-temperature and high vacuum brazing technology, and surface treatment technology, the company can fully meet the extremely high requirements of the medical industry for product research and development and production processes. By utilizing core technologies, the company has expanded its business to new application areas such as nuclear magnetic resonance, medical electron linear accelerators, and semiconductor equipment.

 Stainless steel tube shell components, key components supporting anode and cathode, X-ray outlet
In 2015, Sino New Materials assisted Siemens Axray Vacuum Technology Co., Ltd. in solving the air tightness problem of medical imaging copper alloy thin-walled parts. At the beginning of 2016, Sirui New Materials cooperated with enterprises such as China Electronics 12th Institute, Kunshan Medical Source, and Shanghai Lianying to master more technical testing of ball tube components. In 2017, Sirui New Materials supplied small quantities to enterprises and research institutes such as Siemens and China Electronics 12th Institute in Wuxi.

Up to now, the company has played an important role in the field of CT and DR tube components in China, and is one of the few domestic enterprises that can provide such products and "one-stop" technical services. The company mainly provides products and technical services for domestic CT tube enterprises, and successfully entered the international market in 2021. The company has strong technical strength in this field and its market share is constantly expanding.
Bearing sleeve components

At present, Sirui New Materials has achieved stable bulk supply to Siemens and gradually supplied to major domestic equipment and tube manufacturers such as Shanghai Lianying, Kunshan Yiyuan, Wuxi Maimo, and China Electronics Technology 12th Research Institute, demonstrating good brand penetration and influence.

Yang Ping, Vice General Manager of Sirui New Materials and General Manager of the Medical Business Unit, said in an interview in 2022, "Since its production began in 2018, the company has been expanding its production of medical imaging components every year. It has expanded three times in 2021 and will continue to expand further this year.

02. By 2030, the CT tube market capacity will exceed 60000 sets
In recent years, the State Council has issued a document stating that it will gradually increase the CT/DR configuration of hospitals at all levels. In addition, policies such as relaxing approval and encouraging domestic production have accelerated the development of the CT/DR equipment component market. However, in terms of ball tubes and related components, due to their complex preparation technology and high level of craftsmanship, China has long relied heavily on foreign enterprises. In order to reduce the cost of using CT equipment and strengthen the safety and controllability of key medical fields in China, meet the objective needs of people's health, and achieve the localization and autonomy of tube production has strategic significance.

According to the announcement from Sirui New Materials, the cost of CT tubes accounts for about 20% of the total production cost of CT equipment, and their service life is shorter compared to CT equipment, requiring regular replacement. According to statistics, the average service life of CT tubes in China is 13 months, and the service life of CT equipment usually exceeds 10 years. Even if calculated based on the frequency of replacing tubes every two years, each CT device needs to replace tubes at least 5 times during its service life. This means that the demand for ball tubes brought about by the after-sales maintenance and replacement of CT equipment in the future will far exceed the demand for ball tubes from newly added CT equipment.

According to predictions, the market capacity of CT tubes in China will exceed 60000 sets by 2030, and the market capacity of DR tubes will also reach 40000 sets by 2030. The total market capacity of CT and DR tubes will exceed 100000 sets. In the future, domestic tube manufacturers will continue to maintain their competitive advantage in terms of cost-effectiveness, benefiting from the long-term trend of supply chain localization and overseas whole machine factory localization, as well as the expansion of both the incremental and stock markets for medical imaging equipment.

Sirui New Materials stated that after the implementation of the project, the company will have the ability to produce 30000 sets of CT tube components and 15000 sets of DR tube components annually. From a cost perspective, after the company achieves mass production of tube components, it will leverage economies of scale, reduce the cost of tube components, and help Chinese medical imaging equipment manufacturers form a cost competitive advantage. From the perspective of technology, the company's advanced production technology, perfect process flow, and excellent product quality will to some extent achieve import substitution. The implementation of the project is conducive to promoting the localization process of ball tube components in China and has strategic significance for the independent development of national medical imaging equipment.

Source: http://qixieke.com/Font/index/detailPage.html?id=3255-19