Event: the company released the "2023 semi-Annual report" on the evening of August 22, with an operating income of 705 million yuan, an increase of 75.65% over the same period last year, and a net profit of 67 million yuan, an increase of 38.85% over the same period last year. In the first half of 2023, the company achieved an EPS of 0.40 yuan, an increase of 37.93% over the same period last year.

1. Q2 has seen a high increase in operating income, and the proportion of temperature control revenue in energy storage has rapidly increased. 2023H1 achieved operating income of 705 million yuan, an increase of 75.65% over the same period last year. 2023H1 realized a net profit of 67 million yuan, an increase of 38.85% over the same period last year, deducting 58 million yuan of non-return net profit, an increase of 61.36% over the same period last year (23H1 received government subsidies of 5 million yuan and investment income of 5.4 million yuan on financial assets).

Among them, 2023Q2 achieved business income of 432 million yuan, an increase of 102.27% over the same period last year, and realized net profit of 39 million yuan, up 41.62% over the same period last year, deducting 35 million yuan of non-return net profit, up 60.65% over the same period last year. The company's products mainly cover numerical control equipment temperature control products, power electronic equipment temperature control products and other business:

1) numerical control equipment temperature control products: the revenue of 2023H1 numerical control equipment temperature control products is 316 million yuan, an increase of 13.06% over the same period last year, accounting for 45.61% of business revenue, reducing 24.02pct compared with the same period last year. According to the comprehensive judgment of China Machine tool Industry Association, the machine tool industry will continue to restore growth in 2023, which will help the company's CNC equipment temperature control business growth.

2) temperature control products of power electronic devices: the income of temperature control products of power electronic devices of 2023H1 Company was 372 million yuan, an increase of 352.91% over the same period last year, accounting for 53.65% of business revenue, and an increase of 33.21pct over the same period last year. Mainly benefited from the rapid growth of temperature control income of energy storage, the company's temperature control income of energy storage was about 249 million yuan during the reporting period, and the proportion of liquid cooling products gradually increased. After deducting the income from energy storage business, the company's temperature control products for power electronic devices increased by 49.54% compared with the same period last year, and new energy power generation, power transmission and transformation, and UHV related equipment such as pure water cooling units, temperature control products, also maintained a high growth rate.

3) other businesses: 2023H1's other business income was 5 million yuan, down 87.22% from the same period last year, accounting for 0.74% of operating income, and reducing 9.18pct compared with the same period last year.

Risk hints: raw material price risk, industrial competition intensified risk, liquid cooling technology progress is not as expected.