The company publishes its semi-annual report. 2023H1's revenue was 246 million yuan (-1.22% year on year), and net profit at the parent level was 27 million yuan (-31.02% YoY). In a single quarter, 2023Q2's revenue was 152 million yuan (+15% year on year, +60.98% month on month), and net profit to parent was 24 million yuan (+26.58% year on year). (+680.40% month-on-month). This is mainly due to the continuous increase in shipments of the company's products to downstream core customers.

Product shipments from major core strategic customers in the consumer electronics sector continue to increase. At 2023Q2, the company's consumer electronics coatings achieved revenue of 125 million yuan, +10.31% year-on-year and +66.58% year-on-year. This is mainly due to the company's continued increase in market development efforts in the second quarter, and product shipments to major core strategic customers continued to increase.

In the consumer electronics business, the mobile phone, notebook, and wearable device businesses have grown significantly. (2023Q2, mobile phone paint revenue +8.71%, month on month, +93.12%; notebook paint revenue +14.45%, month on month, +35.14% month on month, wearable device paint revenue +18.08%, +49.62% month on month).

The monthly revenue of the automotive coatings business reached a record high. 2023Q2, the company's automotive coatings achieved revenue of 23.35 million yuan, +34.75% year on year and +40.75% month on month. In June, sales exceeded 10 million yuan, a record high.

This is mainly due to the fact that in the second quarter, many new models from BYD, NIO, Geely and other terminals collaborated to launch mass production one after another. The company's shipments of BYD, NIO, Geely, and Ideal products all achieved rapid year-on-year growth. Looking ahead to the second half of the year, the company will further develop the exterior paint market. It has a layout in Geely luminescent bumpers, BYD spoilers, and BYD grilles. It is expected that the automotive coatings business will continue to grow.

The development of coating products in the fields of aircraft, integrated circuits, and car body manufacturers is progressing smoothly. 2023H1, the first phase of the company's aircraft interior paint project was successfully completed, and a series of supplier qualification certifications and reviews are being carried out.

New ink products used in the integrated circuit industry successfully completed product development and officially began to enter the marketing and sales stage. In addition to this, the company has completed the development of a variety of water-based colorant formulations and laboratory pilot expansion that can be applied to automobile manufacturers, aftermarket, and aviation fields; completed the research and development of varnish formulations for various automotive repair coatings. The product supporting performance results are excellent, and construction performance tests are being carried out; the construction of a series of resin technology research and development systems and other ongoing research projects and new product development such as new functional inks are progressing in an orderly manner according to plan, which is expected to inject new momentum into future long-term development.

Profit forecasting and investment ratings. We expect the company's net profit to be 80 million yuan, 139 million yuan, and 208 million yuan respectively from 2023 to 2025, and EPS to be 0.72 yuan, 1.25 yuan, and 1.86 yuan respectively. According to BPS of 11.95 yuan and 6.0-7.0 times PB in 2023, a reasonable value range of 71.70-83.65 yuan was given, maintaining the “superior to market” rating.

Risk warning: Project construction progress fell short of expectations; product prices fluctuated greatly.