The company released 2023 semi-annual report, the performance is in line with expectations. The company's first-half revenue was 600 million yuan, an increase of 44.8% over the same period last year; the net profit was 81 million yuan, an increase of 42.6% over the same period last year, and the net profit margin was 13.5%. The company's second-quarter revenue and return net profit volume have maintained high growth.

The company's Q2 revenue was 330 million yuan, an increase of 53.8% over the same period last year. The net profit of Q2 was 51 million yuan, an increase of 91.6% over the same period last year. The performance is in line with expectations.

The increase in the proportion of deep-sea business drives the company's continued growth. According to the company's semi-annual report, 23H1's income from special parts for deep-sea equipment is about 232 million yuan, an increase of 15% over the same period last year. Since the production capacity of the key components of the company's 70MN deep-sea oil and gas underwater production system has been completed and put into operation, the growth of sales volume of high value-added products has led to the optimization of the company's revenue structure and the improvement of its overall profitability.

Breakthroughs have been made in high-end forging technology, and the production capacity of 350MN multi-directional die forging is expected in the future. According to the semi-annual report, the company's "one-mold multi-piece valve body forming process" technology research and development has achieved phased results. For wellhead devices and oil production tree equipment, this technology can form two or more 4-inch and less valve bodies on a set of moulds. It can reduce resource consumption and improve production efficiency.

The high prosperity of deep-sea oil and gas development continues, and the demand for customized underwater equipment is accelerating. In the first half of the year, global deep-sea oil and gas investment continued to rise against the background of falling oil prices, and the prosperity of the industry remained high.

According to Westwood data, global oil tree orders increased by 38.4% at the end of June 23 compared with the same period last year.

TechnipFMC, the leading company of oil production trees, accelerated the upward trend in the proportion of 24-25 years' orders.

Profit forecast and investment advice. We estimate that the return net profit of the company from 2023 to 2025 will be 378 million yuan, respectively, and the corresponding profit will be 28.9%, 18.6%, 13.9 times, respectively. Considering that the industry has a clear demeanor and the company's capacity climbing is gradually on the right track, the company is in the stage of rapid growth in performance, we give the company 30xPE in 2023, corresponding to a reasonable value of 28.0 yuan per share. Maintain a "buy" rating.

Risk tips: crude oil and natural gas price decline risk; industry competition intensified risk; raw material cost upward risk and so on.