Event: 2023H1's net profit is expected to lose 1400-18 million yuan, deducting non-return net profit is expected to lose 2100-25 million yuan, of which 2023Q2 expects to achieve return net profit of 1104.47-15.0447 million yuan, deducting non-return net profit of 394.11-7.9411 million yuan.

In the first half of the year, due to the decline in the prosperity of notebooks, it is remarkable to achieve a turnround in a single quarter. Dragged down by the decline in the prosperity of the notebook industry, the company 2022Q4 began to show quarterly losses. In the first half of this year, the downstream recession led to layoffs at the Kunshan factory and sluggish parts of material products, resulting in certain expenses. The decline in the exchange rate of the US dollar in the first quarter resulted in inventory impairment, such as the above-mentioned special expenses caused by industry reasons, as well as interest rate expenses on convertible bonds. In fact, the company is expected to break even. It is worth paying attention to that the company has successfully turned losses into profits in the second quarter, laying the foundation for the realization of annual profits.

Automotive magnesium structure is expected to usher in rapid infiltration, the spring and autumn harvest is approaching. The use of magnesium alloy structural parts is an effective way to realize the lightweight of automobiles. with the continuous maturity and improvement of the preparation process, the application scene of automotive magnesium alloy is extending from small parts such as central control instrument panel and steering wheel to large parts such as CCB crossbeam and motor shell. Chunqiu Electronics is one of the few domestic enterprises with semi-solid injection molding ability, and has signed a strategic cooperation agreement with Desai Xiwei in the field of magnesium alloy small parts. Follow-up will actively layout the CCB crossbeam, motor shell and other large market, the new performance growth pole has been formed.

Notebook computer industry is now a warming trend, upstream supplier pressure is expected to gradually release. According to TrendForce statistics, global notebook shipments in 2022 were only 185 million units, down 24.5% from the same period last year. Fortunately, the notebook industry began to show a trend of recovery from June to July. Global laptop shipments recovered to 40.45 million units in the second quarter, an increase of 15.7% over the previous quarter, the first quarterly increase in six consecutive months. Looking forward to the recovery trend in the third quarter. The pressure from suppliers such as Chunqiu Electronics is expected to be released, and the results are expected to be repaired on a quarterly basis.

Investment advice: the company's 2023-2025 net profit is expected to be 1.22,3.16 and 413 million yuan respectively, the current share price corresponding to PE is 31.1,12 and 9.1 times, maintaining the buy rating.

Risk tips: (1) laptop shipments further decline; (2) magnesium alloy structure penetration of new energy vehicles is not as expected.