[Event]: The company released 2023H1 results, achieving revenue of 972 million yuan, -10.98% year-on-year, net profit of 0.24 million yuan, -82.53% year-on-year, deducting non-net profit of 111 million yuan, -90.95% year-on-year.

Revenue increased month-on-month and improved. Faced with adverse effects such as poor terminal demand, the company team worked hard to overcome external environmental resistance. 2023Q2 achieved revenue of 546 million yuan, +1.24% year-on-year, and an improvement of +28.39% over the previous year.

By product type, the company's 2023H1 TFT series achieved revenue of 918 million yuan, -10.33%, accounting for 94.41% of total revenue and 12.79% of total revenue; the black and white series achieved revenue of 48 million yuan, -19.55%, accounting for 4.94% of total revenue, with a gross margin of 34.68%.

Prices are under pressure, but after deducting non-net profit, the month-on-month increase is significant. Affected by the macroeconomy, the consumer electronics market is sluggish and industry competition is intensifying. At the same time, due to the decline in demand for polarizers from downstream panel manufacturers and module manufacturers, the sales unit price of the company's products has declined by a certain margin, which has led to a decline in the company's profitability. The company's gross profit margin was 13.30%, -10.85 pcts, month-on-month, -0.92 pcts; achieved net profit of 112 million yuan, -83.06% yoy, -4.08%; after deducting non-net profit of 08 billion yuan, -87.13%, +110.27% month-on-year, the median performance forecast shows the company's strong operation and management capabilities.

Looking ahead to the later stages, the capacity utilization rate of each product line is expected to show an upward trend. According to witsview, in late August 2023, the prices of TV panels of various sizes continued to rise; display panels maintained a slight increase under the dominance of **** manufacturers; NB panels joined the price increase for the first time. The timing has entered the third quarter. As high inventories in the market gradually disappear to a relatively reasonable level, demand in the downstream terminal consumer market is gradually picking up. In addition to brand customers in mainland China returning inventory, other major brand customers have also begun to increase panel purchases one after another. As demand grows, it is beneficial for panel prices to continue to rise. As an upstream panel manufacturer, the company's bargaining power is expected to improve marginally. According to the company's announcement, the capacity utilization rate of the company's various product lines showed an upward trend, and the order volume increased rapidly, helping the company to recover its performance in the second half of 2023 and release greater flexibility.

Investment suggestions: We adjusted the company's revenue for 2023-25 to RMB 22.86/41.22/RMB 5.605 billion, and net profit attributable to RMB 1.29/3.29/676 million yuan respectively, corresponding to 38.91/15.22/7.40 times PE, maintaining the “increase in holdings” rating.

Risk warning: Production capacity release falls short of expectations; consumer electronics demand falls short of expectations; new product development falls short of expectations.