Event: the company released its semi-annual report in 2023, 23H1 realized revenue of 565 million yuan, year-on-year-48.4%, net profit of 71 million yuan, year-on-year-82.6%, deducted non-net profit of 38 million yuan, year-on-year-90.9% 23Q2 achieved a revenue of 282 million yuan, a net profit of 31 million yuan, a net profit of 31 million yuan, a net profit of 24.8%, a non-net profit of 5 million yuan, and a net profit of 83.9%.

The results were in line with expectations, and the company's non-net interest rate fell to an all-time low. The company issued a performance notice on July 13, and the current announcement results are in line with expectations. The sharp decline in performance is mainly affected by the industry: the silane industry boomed in 21-22, but product prices fell sharply due to changes in supply and demand patterns and falling prices of raw materials. According to the semi-annual report, the purchase price of silicon powder / allyl allyl glycidyl ether / allyl glycidyl ether / allyl glycidyl ether is-20% 23H1 56% /-7% Mather 14%, and the price of the main product aminosilane / epoxy silane / sulfur-containing silane / vinyl silane / orthosilicate is year-on-year-60% Rue 57% Rue 37% Cue 51% Univ 31%. As a result, the gross profit margin of 23Q2 company is 11.05%, and the net profit rate of Maxim8.46pctter23Q2 is 10.82%, and that of deducting non-net profit margin is 1.86%, reaching the bottom of history.

Functional silane stops falling, and raw material prices provide support. According to Baichuan Yingfu data, the price of silane coupling agent has stopped falling, the price of KH550 in eastern China has remained at 24,000 yuan / ton since June 20, and the price of raw materials has also rebounded. As of August 18, the price of ethanol / allyl chloride was 14.4% higher than that of the same period last month.

Firmly promote capacity investment, the company's strategy is strong. At the bottom of the functional silane, the company is still steady, step by step to promote capacity construction, is expected to rely on the cost advantage to increase market share. Some of the product devices of the "annual output of 65000 tons of silicone new materials technical transformation and capacity expansion project" have passed the completion and acceptance of safety facilities, and the "pilot production scheme of aerogel equipment with an annual output of 23000 tons of special silicone materials (phase I)" has been approved for trial production and can be released after verification by downstream customers.

Investment advice: we are long-term optimistic about the cost advantage of the company and the valuation increase brought about by the introduction of aerogel, but the progress of aerogel production is not as expected. We lowered our 23-25 net return profit to 263,000,000 yuan, and the previous PE was 27.6pm 17.5max 7.9x, downgraded to "overweight" rating.

Risk tips: capacity release is lower than expected, raw material prices fluctuate, and downstream demand is lower than expected.