Maolai specializes in precision optics, and the product market scale is expanding steadily: precision optics is widely used in industrial measurement, high-end equipment manufacturing, lidar, aerospace, life sciences, intelligent equipment, military scientific research and other fields. the market size has reached 13.57 billion yuan in 2021, and Frost Sullivan expects it to reach 26.76 billion yuan in 2026. Since its establishment in 1999, Maolai Optics has focused on the production and research and development of precision optical products, accounting for about 2.4% of the global market share.

Master the core technology of optical processing: Maolai Optics produced a research and development fee of 55 million yuan in 2022. After years of accumulation, Maolai has mastered the optical manufacturing processes such as polishing, edge grinding, coating, molding, gluing, assembly and adjustment, testing, and so on. Part of the process can achieve nanometer precision. Through the combination of process control technology, Maolai can achieve high-quality production of optical components with the help of coating machine, SSI splicing interferometer and magnetorheological polishing machine.

Assist the localization of semiconductor optical equipment: Chinese mainland 2021 semiconductor measurement and lithography equipment market size of about 17.6 billion yuan and 19.1 billion yuan respectively, the demand is huge. Maolai's optical components supply KLA, Camtek and other international enterprises, and enter the supply chain of Shanghai Microelectronics, a domestic lithography machine manufacturer.

Overseas restrictions accelerate the localization of semiconductor optical equipment, and the increased demand for optical components from domestic equipment enterprises is expected to help accelerate the expansion of Maolai semiconductor business.

Multi-dimensional layout life science and VR/AR and other industries: Maolai's optical products are widely used in oral scanning and gene sequencing; in 2021, the company's life science industry revenue exceeded 100 million yuan, an increase of more than 100% over the same period last year; with the release and shipment of customer products, Maolai's VR/AR testing equipment also achieved rapid growth, 2022H1 revenue of 21.01 million yuan, close to the 21-year level. At the same time, the company's products are also used in aerospace, autopilot, biometrics and other fields, and are expected to grow together with related industries.

Investment suggestion: based on the business situation of various industries in Maolai Optics, we expect the company to achieve operating income of 5.60 trillion yuan in 2023-2025, and net profit of 0.82 pounds, 114 pounds, 133 million yuan.

Risk tips: the growth of semiconductor business slows; the impact of trade friction; the progress of product research and development is not as expected.