Incident: The company released its semi-annual report for 2023. From January to June 2023, it achieved operating income of 306 million yuan, an increase of 12.89% over the same period of the previous year; net profit attributable to shareholders of listed companies was 40 million yuan, down 18.92% from the same period last year; basic earnings per share were 0.54 yuan, down 45.96% from the same period last year.

Investment in R&D has been increased, and scientific and technological innovation has achieved remarkable results. During the reporting period, the company's R&D investment reached 59 million yuan, an increase of 8.35% over the same period last year; the number of R&D personnel was 336, an increase of 23 over the same period last year. By the end of the reporting period, the company had 41 patents, 168 software copyrights, and continued to advance in various technical directions. In the direction of computational control, the company continues to adapt to mainstream processor platforms and domestic operating systems, conduct pre-research and verification of several new processing platforms, and successfully implement applications in systems such as flight control computers, mission computers, and visual navigation computers in the drone field. In the direction of signal processing, the team's AI processing capabilities have been improved, and various mainstream AI network models such as LeNet have been completed and operated on multiple mainstream AI platforms. In the direction of high-capacity storage, file system optimization has been completed, and development of a new type of file system has begun. In the direction of graphic images, infrared images are read out for mature application, assembly, and mass production at 640*512 resolution, and technical pre-research and technology accumulation are completed at 1K resolution.

The core technical advantages are obvious, and future development prospects are broad. The company has mastered the core technology of using embedded computer modules in various national key areas, is committed to serving advanced key areas of the national defense technology industry, system development and other fields, and focuses on providing customized embedded computer modules and solutions. On the information battlefield, all systems equipped in key high-tech fields require the support of embedded technology, and have an irreplaceable position in intelligent equipment in key areas.

As the degree of informatization and intelligence of equipment in key areas continues to increase, the demand for the use of embedded computers in key areas of the country will also continue to grow, and the future prospects are very broad.

Profit forecast and investment rating: The company's net profit for 2023-2025 is expected to be 118 million yuan, 175 million yuan, 210 million yuan, EPS is 1.57 yuan, 2.33 yuan, and 2.80 yuan, and the corresponding PE is 32 times, 22 times, and 18 times, giving a “buy” rating.

Risk warning: Military orders are growing less than expected; fund-raising projects are progressing less than expected.