Summary of events: the company's 23H1 realized revenue of 518 million yuan, year-on-year + 42.57%, net profit of 48 million yuan, year-on-year + 29.34%, and non-return net profit of 45 million yuan, + 25.28%. From a quarterly point of view, 23Q2 realized revenue of 295 million yuan, year-on-year + 42.33%, month-on-month + 32.31%; return-to-mother net profit 27 million yuan, year-on-year + 9.26%, month-on-month + 28.50%; deduction of non-return net profit 26 million yuan, year-on-year + 8.62%, month-on-month + 36.69%.

Comments: 23H1 gross profit margin has declined

1. Quantity: 2724 tons of 23H1 superalloy. 23H1 has an output of 2724 tons of superalloy. Considering the volume of outsourced processing (22,900 tons outsourced for the whole year), we expect the company's 23H1 shipments to be more than 3000 tons. The company's product orders are strong, with Yancheng Dongtai Phase II project gradually put into production, the company's capacity bottleneck has been broken through, and shipments are expected to continue to grow in the second half of the year.

two。 Price: 23H1 gross margin decreased slightly. 23H1 gross margin fell 3.28pct to 19.07 per cent. In a single quarter, 23Q2's gross profit margin was 16.55%, down 4.46pct from the same period last year and 5.85pct from the previous quarter. Due to the 12.79% month-on-month drop in 23Q2 nickel price and 12.14% month-on-month drop in cobalt price, it is expected that the price fluctuation of some high-priced raw materials purchased in the previous period will lead to a decline in the company's gross profit margin.

Core point: deep ploughing civil superalloy, downstream multi-point flowering to promote growth 1. The prosperity of the oil service industry has increased, and orders in the oil and gas field have increased. High oil prices have led to an increase in upstream capital spending on oil and gas, which is expected to grow 7 per cent year-on-year in 2023, according to IEA data. Petrochemical and chemical industry business accounts for a large proportion of the company's business, petrochemical, chemical industry new construction, transformation of large-scale projects continue to increase, supporting the company's demand for high-temperature corrosion-resistant alloys.

two。 The expansion of polysilicon production capacity will boost the development of the company's new energy products. Under the background of "double carbon", the rapid growth of photovoltaic installation will promote the continuous release of polysilicon production capacity. China's polysilicon production capacity is expected to reach 2.78 million tons in 2023, an increase of 156.22% over the same period last year. The company's main products in the field of polysilicon are cold hydrogenation devices, nickel-based pumps, superalloy pipes, etc., and the expansion of polysilicon production capacity promotes the development of the company's new energy products.

3. New projects continue to move forward and break through capacity bottlenecks. The "Special equipment Core parts Manufacturing Project" raised by IPO is expected to be put into production in the second half of 23 years, with an original planned production capacity of about 2550 tons. The company expects that after the project reaches production, it will bring an average annual operating income of 543.16 million yuan and a net profit of about 54.31 million yuan. In addition, the company plans to build 4500 tons of deformed high temperature corrosion resistant alloy products in the Dongtai base of Yancheng. With the continuous deployment of production capacity, the company's product delivery capacity will be significantly enhanced.

Investment suggestion: the company deeply ploughs the civil superalloy products, the downstream main application field oil and gas capital expenditure increases, the company product order is exuberant. In addition, the company's products are gradually expanding to new energy, nuclear power, marine engineering and other fields, and the product demand space is opened. With the production capacity of IPO investment project put into operation, the company's performance release is expected. We estimate that the company's homing net profit from 2023 to 2025 will be 1.131,148pm respectively, corresponding to the current price, the PE in 2023-2025 will be times that of 26-20-15, maintaining the "recommended" rating.

Risk hint: project less than expected risk, raw material price fluctuation risk, market competition risk and so on.