Event: the company recently issued the 2023 half-yearly report. In the first half of 2023, the company realized operating income of 97 million yuan, YoY+42.24%; net profit of 41 million yuan, YoY+31.62%; deduction of non-home net profit of 30 million yuan, and YoY+24.89%; gross profit margin of 85.12%, reducing 1.31pct compared with the same period last year.

The company's performance grew rapidly in the first half of 2023.

Comments: products have been verified and continuously introduced into downstream customers, 23Q2 single-quarter quarter-on-quarter greatly improved. In a single quarter, 2023Q2 achieved operating income of 85 million yuan, YoY+50.58%; homed net profit of 47 million yuan, and YoY+38.72%; gross profit of 86.35%, down 1.06pct from the same period last year. The rapid growth of the company's performance in the second quarter reversed the loss trend in the first quarter, with obvious seasonality, mainly due to the increase in trial production and mass production projects after the products were verified and introduced by downstream customers, resulting in an increase in the company's sales revenue. On the expense side, the company's sales expenses in the first half of 2023 were 3.2853 million yuan, YoY+77.65%, was mainly due to the increase in the salary of employees and the number of sales personnel; management expenses was 12.203 million yuan, while YoY+31.06%, was mainly due to the increase in employee compensation, depreciation and amortization, etc.; R & D expenses was 33.1907 million yuan, and YoY+29.32%, was mainly due to the increase in R & D personnel and salaries, with a steady increase in R & D investment. In addition, the net cash flow of the company's operating activities in the first half of the year was 71000 yuan, and YoY-99.82%, was mainly due to the increase in cash taxes and fees paid to employees compared with the same period last year.

MEMS inertial devices core manufacturers, gyroscopes and accelerometers are expanding rapidly. The company has been committed to the research and production of high-performance MEMS inertial devices for a long time, and the product performance index has reached the navigation level and the international leading level. Compared with laser and fiber optic gyroscope, MEMS gyroscope has the advantages of small size and low cost. it has a broad application prospect in the military and civilian market, and the permeability in the field of high-performance inertia is expected to increase rapidly. During the reporting period, the company's revenue from MEMS gyroscope and MEMS accelerometer increased by 41.44% and 40.68% respectively compared with the same period last year, and customer recognition and market acceptance continued to improve.

Expanding the IMU business of autopilot inertial sensors at the specification level is expected to create a new growth curve. The new edition of Intelligent Network United Automobile Standard Guide has been released, the 25-year revision includes 100 self-driving standards, the development of L3 self-driving is accelerated, the demand for on-board inertial navigation IMU as the core perception component is expected to break out, and the company's L3 + self-driving MEMS IMU research and development project is expected to quickly increase its performance after delivery.

Profit forecast: core Novast is a scarce MEMS inertial navigation manufacturer in the industry, which is optimistic about the company's growing performance. It is estimated that the operating income in 2023-25 is 323 million yuan, the net profit is 2.18 million yuan, and the net profit is 2.18 million yuan, corresponding to 0.75 yuan for EPS 0.39 pound, maintaining the "buy" rating.

Risk hints: research and development risks, new product volume is not as expected, raw material prices rise.