Event: the company released the 2023 interim report, 2023H1 realized revenue of 2.07 billion yuan (+ 61.7%) and net profit of 190 million yuan (+ 57.3%), of which Q2 in 2023 achieved revenue of 1.1 billion yuan (+ 56.1%) and net profit of 100 million yuan (+ 52.0%).

The photovoltaic and new energy vehicle industry maintained high growth. 1) from a sub-industry point of view, 2023H1 accounts for nearly 90% of photovoltaic and new energy vehicles, maintaining high growth; consumer electronics and security account for about 10%, which has declined due to downstream demand. 2) in terms of products, 2023H1's precision die casting structure business achieved revenue of 700 million yuan, an increase of 39.8% over the same period last year; revenue of precision injection molding structure business reached 700 million yuan, an increase of 90.5% over the same period last year; and revenue of profile stamping structure business reached 640 million yuan, an increase of 67.4% over the same period last year.

Downstream die-casting structure demand is weak, Q2 gross profit margin has declined. 1) 2023H1's overall gross profit margin was 19.2%, down 0.5 ppm from the same period last year; among them, Q2 single-quarter gross profit margin in 2023 was 17.5%, down 1.8pp from the same period last year and 3.6pp from the previous year. Among them, the gross profit margin of 2023H1 precision die casting structure business was 17.6%, down 4.9ppm from the same period last year; the gross profit margin of precision injection molding structure business was 22.6%, an increase of 3.5ppm over the same period last year; and the gross profit margin of profile stamping structure business was 17.2%, an increase of 0.8pp over the same period last year. 2) during 2023H1, the expense rate was 8.8%, which increased 1.3pp compared with the same period last year, including sales expense rate of 0.8%, year-on-year decrease of 0.1pp, management expense rate of 3.3%, year-on-year increase of 0.6pp, R & D expense rate of 4.6%, year-on-year increase of 0.8pp, and financial expense rate of 0.2%, which is basically the same as the same period last year. 3) in terms of net interest rate, the overall net interest rate of 2023H1 is 9.4%, down 0.3 ppm from the same period last year; among them, the net interest rate of Q2 in 2023 was 9.3%, down 0.3pp from the same period last year and 0.2pp from the previous year.

At present, the development of the company is mainly restricted by production capacity, speeding up production capacity construction at home and abroad. The company currently has 8 production bases in China, of which the new production bases in Jiangxi and Anhui have been put into production at the end of 2022. In 2022, the company will mainly build domestic production bases, and in 2023 it will speed up the deployment and construction of overseas production bases, mainly including North America, Mexico and Europe and Hungary, to expand the production capacity of overseas production bases.

Profit forecast and investment advice. It is estimated that the company's net profit from 2023 to 2025 will be 6.09,8.74,1.118 billion yuan respectively, and the corresponding EPS will be 1.52,2.19,2.79 yuan respectively. The company is a domestic one-stop multi-process precision structural parts leading enterprise, maintaining the "hold" rating.

Risk hints: the risk of raw material price fluctuation; the risk of intensified market competition; the risk of large scale of accounts receivable and inventory, etc.