Event: the company publishes its 2023 semi-annual report. In the first half of 2023, revenue reached 452 million yuan, an increase of 34.44 percent over the same period last year, and the net profit returned to the home was 8 million yuan, a decrease of 34.53 percent over the same period last year.

Revenue increased compared with the same period last year, and net profit was repaired compared with the same period last year. The company's 2023H1 realized revenue of 452 million yuan, of which 2023Q2 realized revenue of 243 million yuan, an increase of 14.28% month-on-month and 34.88% over the same period last year. The company's 2023H1 sputtering target, evaporation materials and alloy and metal materials business realized revenue of 2.08,0.64 and 173 million yuan respectively, up 12.01%,-32.38% and 329.29% year-on-year. 2023H1 gross profit margins of the three major businesses were 18.80%, 7.19% and 4.63% respectively, up-2.01%,-0.21% and 2.68pct. The company's 2023H1 gross profit margin was 12.51%, down 2.86pct from the same period last year, mainly due to the significant increase in revenue share of alloys and metal materials with lower gross profit margin. The company's 2023H1 sales, management, finance and R & D expenditure rates were 1.63%, 4.42%, 1.71% and 2.80%, respectively, representing year-on-year increases of-0.17,0.50,-0.13 and 0.95pct.

The 2023H1 of the company realized a net profit of 8 million yuan. With the improvement of the capacity utilization of the company's airfront base, 2023Q2's single-quarter net profit improved, with an increase of more than 120% month-on-month and 37.66% year-on-year. The company's 2023H1 cash and cash equivalents increased by 17 million yuan, an increase of 70 million yuan over the same period last year.

Based on the field of PVD coating, multi-dimensional business development. The core competitiveness of the company is the compound understanding and comprehensive application ability of PVD coating equipment end, process end and material end. Since its establishment, the company has been specializing in the field of PVD coating materials, serving more than 400 customers worldwide, covering optical communications, flat panel display, energy-saving glass, LED, photovoltaic and other industries. In the optical field, the company continues to promote the downstream customer verification of PVD pearlescent pigments, which is expected to contribute to the development of the company. In the field of photovoltaic, the company continues to promote the expansion and verification of ITO targets, and is expected to benefit from the continuous release of HJT production capacity in the future.

The business of compound fluid collector is expected to open up the space for development. In October 2022, the company formally signed a composite copper foil equipment agreement with Dongwei Technology and Tengsheng Technology, and completed the equipment selection and decision work. The company has a certain accumulation in the equipment side, and maintains good communication with Japan Aifa, American AKT and many domestic vacuum manufacturers. As the company's composite copper foil project equipment enters the process of equipment delivery and installation, it is expected to further open up the company's development space.

Profit forecast, valuation and rating: taking into account the slow pace of recovery in consumer electronics-related areas downstream of the company, the net profit of our company in 2023-2024 is forecast to be 0.36 yuan and 76 million yuan (the previous value is 0.70 yuan and 115 million yuan respectively), and the net profit in 2023-2025 is forecast to be 114 million yuan, and the corresponding EPS in 2023-2025 is 0.23,0.50 and 0.75 yuan. The company's PVD coating material technology is expected to continue to be used in the fields of optical communication, flat panel display, energy-saving glass, LED, photovoltaic and composite copper foil.

Risk hints: industry competition aggravates risks; photovoltaic heterojunction industrialization is lower than expected risk; domestic photovoltaic / wind power policy fluctuation risk; new technology change risk; PET copper foil business mass production schedule is not as expected risk and so on.