The company's revenue in the first half of 2023 was + 41% compared with the same period last year, and its net profit was + 123% compared with the same period last year, continuing to maintain rapid growth. As of the end of Q2, the company's contract liabilities and inventory have remained high, indicating that the company has sufficient orders on hand; in addition, the company's equity incentive plan shows that the company has sufficient confidence in the performance in the second half of the year, and we are optimistic about the release of the company's performance in the second half of the year. We believe that the company is expected to continue to deeply participate in and benefit from the innovation of A customers in mobile phones, MR and headphones, while continuing to benefit from domestic wafer expansion and the entry of wafer-end customers, maintain the company's target share price of 70 yuan and maintain the "buy" rating.

23H1 performance slightly exceeded the company's expectations and continued to maintain rapid growth. In the first half of 2023, the company realized revenue of 1.404 billion yuan, year-on-year + 41.03%, gross profit of 40.39%, year-on-year + 0.34pct, net profit of 104 million yuan, + 122.69%, and non-return net profit of 71 million yuan, + 79.00%. The performance slightly exceeded the company's previous expectations and continued to maintain rapid growth, mainly due to the company's deep cultivation of the intelligent manufacturing equipment industry for many years, accumulated more high-quality customers, achieved win-win cooperation, and the sales scale continued to grow.

23Q2 performance was stable year-on-year but decreased significantly compared with the same period last year, mainly affected by the rhythm of revenue recognition. In a single quarter, 23Q2 achieved revenue of 689 million yuan, + 20.42% year-on-year, month-on-month ratio of-3.68%; gross profit of 39.78%, year-on-year-0.56pct, month-on-month ratio of-1.19pcts; net profit of 31 million yuan, + 51.49% year-on-year,-57.43%; and net profit of 18 million yuan, + 1.74%, and month-on-month profit of-64.75%. We believe that the year-on-year stability of Q2 performance is mainly due to the revenue recognition in the second half of the year due to the delayed acceptance of the prospective module project supplied to customers A, while there is no significant increase in other 3C business compared with the same period; the significant month-on-month decline is mainly due to the recognized income of some new headphone production line equipment in 2023Q1.

Looking forward to the second half of the year, 2023 is still the stage of the release of periscope module equipment, and is optimistic about the performance release in the second half of the year. As of June 30, 23, the company's contract debt was 958 million yuan, an increase of 600 million yuan over the same period last year, and an increase of 340 million yuan compared with the end of Q1. The company's inventory reached 1.731 billion yuan, an increase of 384 million yuan over the same period last year. The increase in the company's contract liabilities is mainly due to the increase in prepaid accounts received from customers in the semiconductor and consumer electronics industries, and inventory is mainly due to products and equipment that have not been checked and accepted after delivery. Contract liabilities and inventory are growing rapidly, which shows that the company has sufficient orders on hand. In terms of semiconductor business, the company is expected to further develop new Fab customers on the basis of existing wafer-end customers. The company issued an equity incentive plan on August 6, which can be lifted by 50% respectively 24 months after the date of grant. In the first / second lifting period, the company-level performance evaluation requirements are respectively 2023 Universe 2024 deduction of non-return net profit of 3630 million yuan, respectively + 25% 19.4% compared with the same period last year.

The company deducts non-return net profit of 71 million yuan in the first half of the year. If it achieves the 2023 target, it needs to achieve 289 million yuan deduction of non-net profit in the second half of the year, indicating that the company has strong confidence in its performance in the second half of the year.

Looking forward to the follow-up, we believe that the core strategy is based on the original 3C major customer expansion category, while actively expanding into semiconductors and new energy equipment. (1) A client: the company has cooperated deeply with A customers for more than ten years, and its products have expanded from watch equipment to mobile phone and headphone equipment. It is already a head supplier of 3C automation equipment for A customers. It is expected that the company will also be deeply involved in the follow-up innovation of A customers in periscope, MR and headphones. (2) Semiconductors and new energy: the company earlier acquired Japan's leading wafer testing equipment supplier OPTIMA to cut into the semiconductor field, covering SUMCO, SK siltron, Samsung and other overseas semiconductor leading customers, domestic customers include Yi Si, Central, Jin Ruihong, Shanghai Silicon, Zhongxin Wafer, etc. At the same time, the company acquired Wuxi Changding, Kunshan Pingcheng and Linou Technology into the field of auto parts / lithium battery intelligent equipment, and established long-term and stable cooperative relations with customers such as mainland Automobile, Japanese Electric, Murata New Energy and so on. the follow-up is expected to become the company's second growth curve.

Risk factors: the risk of deterioration of the market competition pattern; the risk of loss of core technical personnel; the risk of high customer concentration; the risk of lower-than-expected shipments of consumer electronics terminals and the development of semiconductors and new energy business; the risk of exchange rate fluctuations.

Profit forecast, valuation and rating: the company is the leading 3C automation equipment manufacturer in China, deeply engaged in the consumer electronics industry for more than 20 years, deeply bound to A customers and their industrial chain, epitaxial layout in the field of semiconductors and new energy. We are optimistic that the company will deeply participate in and benefit from the innovation of A customers in mobile phones, MR and headphones, continue to expand the product category, and further open up the growth space. We maintain the company's revenue forecast of 2023-2025 million yuan in 42-59-69, and the net profit forecast of homing mother is 446 million yuan, 646 million yuan, and 753 million yuan, corresponding to the EPS forecast of 2.34 million yuan, 3.39 billion yuan, respectively. As of August 17, 2023, the PE of the current market capitalization of Bogong Seiko, Smart Cube, Anda Intelligence and Jingmei Electronics corresponding to the 2023 profit is 71 times that of 24x30 pounds, and the average 2023E PE is 35 times (based on the consensus expectation of Wind). Based on the prudent principle, we give the company 30 times the target PE in 2023, maintain the target price at 70 yuan and maintain the "buy" rating.