Event: according to the company's "2021 semi-annual report", 2021H1 realized revenue of 1.581 billion yuan (+ 45.59%) and net profit of 157 million yuan (+ 21.16%); 2021Q2 realized revenue of 997 million yuan (+ 49.54%) and net profit of 110 million yuan (+ 26.13%), which was in line with expectations.

From the perspective of sub-business: 1) Intelligent equipment business: revenue 690 million yuan (+ 48%), subsidiary giant industrial revenue 298 million yuan (+ 81.7%), net profit 43.16 million yuan (2.66 million yuan in the same period last year), which is expected to be mainly related to the high revenue growth of lithium power equipment. during the reporting period, the company's high-series capacitive equipment was successfully applied in customers such as BYD, which was highly appraised by the industry and effectively improved the consistency of the battery. The charge and discharge efficiency has been increased by more than 20%, and the debugging workload has been reduced by more than 50%, which has helped customers to significantly reduce operation costs, and have successively won more than 10 series production line orders for several leading lithium power production enterprises. 2) testing service business: revenue 310 million yuan (+ 11%, an increase of 26% compared with 2019), Weikai testing net profit 43.48 million yuan (- 26%). The low year-on-year growth rate of revenue is mainly related to the epidemic situation in Guangzhou and the weak export of household appliances in the second quarter. 13 new laboratories were completed and put into operation in the first half of the year, and a number of laboratories under construction are expected to be completed and put into operation this year. The service focuses on smart home, smart car, smart equipment, 5G communications, medical and health, consumer supplies, rail transit and other areas, with a good long-term development trend. 3) Environmental protection paint and resin business: the revenue is 550 million yuan (+ 81%), and the net profit of giant materials is 29.75 million yuan (+ 103.4%), mainly due to the full release of 40,000 tons of production capacity in the first phase, which is expected to be trial-produced in September this year.

The company is in the research project layout of fuel cell integrated testing equipment and high-voltage series component charge and discharge power equipment and other fields. From the point of view of the research project of the company, in the future, the company will mainly turn the layout of lithium power battery in high voltage series into the development of separate capacity charge and discharge power supply equipment (less than 200 series). The independent design, development and application of the blade power battery testing needle bed (mainly designed and developed to meet the testing of the blade battery, the design, development, testing and verification of the prototype have been completed, and all the performance indicators meet the customer requirements. Has been recognized by the customer. At present, it has been combined with the actual engineering project, applied to mass production), the development of integrated testing equipment for automotive fuel cell system (at present, the research and design work of the overall scheme and several key modules have been completed), and the development of a new type of high temperature pressure forming equipment for soft package power cell (to complete the design, development, testing and verification of the prototype, all the performance indicators meet customer requirements and have been recognized by customers. The prototype has been used in the actual production) and the development of the test equipment verification platform for the thermal management system of new energy vehicles (which is just beginning at present).

Investment suggestion: the company's 2021-2022 net profit is expected to be 367 million yuan (+ 29.8%) and 525 million yuan (+ 43.1%), corresponding to 0.91 yuan and 1.30 yuan respectively for EPS. The buy-A rating is given, and the 6-month target price is 51.77 yuan, equivalent to a dynamic price-to-earnings ratio of 40 times in 2022.

Risk tips: 1. Lithium electricity order is lower than expected risk; 2. The risk that depreciation continues to rise sharply as a result of continued large-scale capital expenditure.