1H23's revenue is + 13% year-on-year, and its net profit is + 52% year-on-year.

The company issued a 1H23 performance announcement: 1H23 revenue from + 13% to 1.61 billion yuan, net profit from home + 52% to 121 million yuan, non-profit from + 40% to 99 million yuan (non-recurrent profit and loss of 22 million yuan, including asset disposal income of 15 million yuan / government subsidy of 11 million yuan); 2Q23 income from + 2% to 787 million yuan, and net profit from home + 52% to 65 million yuan. It is estimated that the return net profit in 23-25 years will be 3.90.47 billion yuan, which is comparable to the company's 23-year PE average of 30x under the unanimous expectation of Wind, and gives the company a 23-year 30x PE valuation, corresponding to the target price of 42.60 yuan (the previous value is 42.60 yuan) to maintain the overweight rating.

1H23 steam zero business contributed significant performance increment, and gross profit margin improved significantly compared with the same period last year.

The high increase in 1H23 performance benefits from: 1) the revenue side is driven by communications and automobile zero two-wheel drive, and the rapid expansion of automobile zero business. In the field of communications, the company's 5G base station components are bound to head customers such as Ericsson / Huawei, with steady growth in 1H23 revenue from + 3% to 840 million yuan (affected by seasonal factors). In the automotive field, the company supports high-quality customers such as Rivian/ NIO Inc. / XPeng Inc. / Zhiji, as well as world-renowned photovoltaic solar companies and domestic head new energy power battery manufacturers, benefiting from core new energy customer production and marketing expansion and accelerated capacity release, 1H23 zero business revenue + 26% year-on-year to 750 million yuan. 2) on the profit side, 1H23 gross profit margin year-on-year + 1.6pct to 18.44%, 2Q23 month-on-month ratio + 2.73/-0.25pct to 18.31%, of which 1H23 zero business gross profit margin year-on-year + 3.4pct to 14.4%, communications business year-on-year + 1pct to 20.2% Q2 gross profit margin month-on-month decline may be due to the Q2 month-on-month increase in aluminum price The 1H23 period rate is from + 0.68pct to 10% year on year, the R & D rate is from + 0.76pct to 4.84% (due to the increase in R & D projects), the management rate is from + 0.77pct to 4.19% (due to the increase in business volume and listing fees), and the sales rate / financial rate is year-on-year. The sales rate / financial rate is respectively year-on-year and-1.3pct/-2.6pct, which may be due to exchange rate fluctuations.

Capacity construction will continue to promote the release of orders and accelerate the global production layout.

1H23 actively promotes the construction of new energy vehicles, 5G communication parts and moulds for fund-raising projects. At present, the main project has been completed, and some production lines have been debugged and put into operation. At the same time, in order to better serve East China customers, the company set up a wholly-owned subsidiary in Maanshan, Anhui Province, to start the construction of new energy vehicle structure and 5G communication base station structure project. The company expects 1H24 to be completed and 2H24 to be put into production, which is expected to further increase existing production capacity and meet the production needs of several customers' platform-level new products. The company also plans to build new production bases in North America and Mexico to speed up the global layout. We are optimistic that the company's capacity expansion will cooperate with the further release of orders.

Integrated die-casting and energy storage emerging markets are expected to open up new growth points of business.

On integrated die casting, the company has made an active layout. Some samples of the large-scale magnesium alloy die-casting project jointly operated by 1H23 and the National magnesium Center of Chongqing University have been trial-produced. 4500T/7000T/8000T large-scale integrated die-casting technology has been applied with a yield of 90%. In the future, it will be expanded to larger die-casting tonnage and more integrated products. In terms of energy storage business, 1H23 actively develops energy storage market and customers. We believe that the company itself has mature technical experience in aluminum alloy structures and super-large aluminum alloy die castings in the field of communication, and is expected to move to energy storage. Superimposed company's customer resources in the field of communications and automotive are of high quality, and the follow-up customer development is worth looking forward to.

Risk tips: customer development is not as expected; downstream demand is not as expected; 5G base station construction is not as expected.