Event: The company released its 2023 annual report. In 2023H1, the company achieved revenue of 514 million yuan, an increase of 19.69% over the previous year; realized net profit of 53.03 million yuan, an increase of 69.77% over the previous year; achieved net profit of 46.22 million yuan, an increase of 84.40% over the previous year.

Revenue and profit both increased, and profitability increased. The company gave full play to the advantages of the entire product chain from software and hardware to system integration, actively developed business and improved project delivery capabilities. 2023H1 successfully delivered new energy, communication equipment, pharmaceuticals, aerospace and other industries, and achieved continuous revenue growth. The company focuses on R&D investment, and the self-development rate of products exceeds 80%. As the production capacity advantage of fund-raising projects gradually became apparent, the company's operating efficiency increased, the cost reduction effect was remarkable, and the gross margin increased steadily. The gross margin of 2023H1 Company was 29.88%, an increase of 4.81 pct over the previous year.

In terms of expenses, the company continued to improve its cost control capabilities. Among them, the company's 2023H1 financial and R&D expense ratios were -0.34% and 7.19%, respectively, down 0.45 pct and 2.28 pct from the previous year. The company's profitability increased. The 2023H1 net interest rate was 10.31%, an increase of 3.04 pct over the previous year.

The orders in hand are sufficient, and the development momentum is full. The company added 294 million yuan in orders in 2023H1, of which a contract amount of 192 million yuan has been signed, and a contract amount of 102 million yuan has not yet been signed to win the bid. As of June 30, 2023, the company's active orders with unconfirmed revenue were 756 million yuan (counting the amount of contracts over 100,000 yuan, not including after-sales service), of which the contract amount had been signed was 654 million yuan, and the contract amount that had not yet been signed was 102 million yuan. The company's sufficient on-hand orders will provide strong support for subsequent development.

Actively explore new business fields, and gradually improve production capacity construction. In terms of business development, the company actively explores markets and promotes transformation and upgrading. 2023H1 has made real progress in petrochemical, food and beverage, semiconductor and other industries.

In addition, the company actively explores the application of products in key fields such as healthcare, energy saving and environmental protection, and smart plant factories, focusing on leading customers. The company continues to deepen the layout of its main business areas. It has applied for the establishment of wholly-owned subsidiaries in Germany and the US, and is actively exploring the international market with two intelligent warehousing systems already in operation in the US and Germany as demonstration projects. In terms of capacity construction for fund-raising projects, the company's Super Future Factory has now been put into use in phase I and phase II, the main project of phase III has also been completed, and production capacity construction is gradually being improved. After the investment in the third phase of construction is completed, it can meet the demand for continuous growth in production capacity over the next 2-3 years.

Profit forecasting, valuation and rating: The company's revenue and profit both increased, and profitability increased. The company continues to explore new business areas, has sufficient orders, and is gradually improving production capacity. We are optimistic about the company's future development space.

We maintain the company's net profit forecast for 2023-2025 at 131, 167 million yuan, corresponding EPS of 1.81, 2.30, and 2.85 yuan, and corresponding PE at 19x, 15x, and 12x, maintaining the “buy” rating.

Risk warning: macro environmental risk; risk of unsustainable customer orders; risk of bad debt in accounts receivable and contract assets; risk of fluctuation in the stock price of secondary IPOs.