Incident: The company disclosed its 2022 annual report, achieving annual revenue of 903 million yuan, a year-on-year decrease of 16.83%, a year-on-year net profit of 26 million yuan, an increase of 155.78% over the previous year, and net profit after deduction of 0.2 billion yuan, an increase of 127.32% over the previous year. The performance turned a loss into a profit, in line with expectations.

The company's revenue declined somewhat in 2022 due to pressure from uncontrollable factors, and there are now sufficient hand orders:

The decline in the company's annual revenue was mainly due to the complex and varied pattern at the beginning of the year. The company's project development, raw material procurement, manufacturing, logistics and transportation, installation and commissioning were all negatively affected to varying degrees, causing delays in product delivery to meet the revenue recognition requirements, which had some negative impact on the company's revenue in the first half of the year, down 29.50% from the previous year. The domestic situation improved in the second half of the year. The company seized the opportunity to improve operational efficiency, and reduced the negative impact of adverse factors at home and abroad on the company's revenue in the first half of the year to a certain extent. Looking at the whole year, the company's revenue fell only 16.83% year-on-year. As of the disclosure date of the annual report, the company's current orders of about 1,217 billion yuan will be delivered one after another, and the overall situation is improving.

The company's profitability continued to improve in 2022, and the overall trend of its main business for the full year of '23 was positive: in 2022, the company's comprehensive gross margin was 22.17%, an increase of 6.86 pct over the previous year, achieving a significant increase in comprehensive gross margin. The main reasons are the following four aspects: 1. Optimizing the gross margin level of orders: the company adopted divestment of some businesses with low gross margins and strategic abandonment of some orders with low profit margins and poor payment terms, improving order acceptance quality at the source; 2. Strengthening product structure optimization: tending to seek orders for products with relatively high gross margin levels; 3. The surge in equipment upgrade business with high gross margin levels: with the rapid advancement of large-scale and thinning, the company's equipment upgrade business surged, up 358.88% over the same period last year; 4. Strengthening cost control to reduce the company's operating costs: the company continued to reduce operating costs Promote product standardization and modular design, and reduce manufacturing costs by introducing the JIT model to reduce the backlog of materials in all aspects, optimize assembly and debugging processes, and shorten standard working hours. Looking at the overall trend of the company's main business throughout '23, the overall trend of the company's main business improved.

The company has increased investment in R&D of copper electroplating equipment and actively created new performance growth points: the company plans to invest 1 billion yuan to establish a new subsidiary in Nantong as the main body of the heterojunction battery equipment project to promote the company's original VDI electroplating technology for copper grid heterojunction batteries. Currently, in terms of the metallization process, the preliminary results of the second phase of verification between the company and China Power Investment Group New Energy Technology Co., Ltd. have performed well overall, and are striving to successfully build the industry's first high-capacity copper grid heterogeneous production line in the third quarter of '23. In terms of graphics, the company also set up a project and carried out development and research on related equipment in early '23, striving to introduce updated and more competitive solutions, accelerate its becoming a complete copper plating line supplier, opening up a new breakthrough point for the company's performance.

Investment advice: The leading position of photovoltaic automation equipment is stable, and the performance of the “new energy+pan-semiconductor business” two-wheel drive company is growing rapidly. We expect the company to achieve operating income of 1,583/2,055/ 2,322 billion yuan in 2023-2025, and the net profit of the mother of the mother is 121/203/25 million respectively. The corresponding PE was 52.10/31.00/25.21 times respectively. It was covered for the first time and gave an “increase in holdings” rating.

Risk warning: New technology progress falls short of expectations; market competition intensifies; downstream customer production expansion falls short of expectations