The net profit of 23H1 is-31% compared with the same period last year, maintaining the "overweight" rating.

Feikai material released its semi-annual report on August 24th. In 2023, H1 realized revenue of 1.318 billion yuan (yoy-20%), net profit of 174 million yuan (yoy-31%) and non-net profit of 126 million yuan (yoy-54%). Among them, Q2 realized revenue of 716 million yuan (yoy-8%,qoq+19%) and net profit of 102 million yuan (yoy-11%,qoq+41%). We estimate that the return net profit of the company from 2023 to 2025 is 644 million yuan, respectively, and the corresponding EPS is 0.85, 1.02 and 1.22 yuan, respectively. Comparable company's 23-year Wind unanimously expects the average PE to be 19 times, taking into account the company's semiconductor material field layout, give the company 23 years 21 times PE, the target price of 17.85 yuan, maintain the "over-holding" rating.

The optical fiber boom has driven the company's UV curing plate, and the demand for pharmaceutical intermediates has shrunk the UV curing material plate, benefiting from the development of 5G communications construction and the expansion of the scene of new plastic coating materials, achieving year-on-year revenue of + 3% to 334 million yuan and gross profit margin of + 2.4pct to 33.1%. In the second half of the year, operators and non-operators will continue to launch large-scale optical fiber and cable bidding projects to support the sustained development of the company's business; pharmaceutical intermediates sector, affected by reduced product demand, production cycle and production capacity, achieve revenue of-73 to 85 million yuan compared with the same period last year. 23H1, the company's comprehensive gross profit margin yoy-5.1pct to 35.2%; sales / management / R & D / financial expense rate yoy-0.2/+1.7/+0.2/+0.8pct to 5.0, 9.0, 6.8, and 2.1%.

The prosperity of the electronics industry has recovered somewhat, and semiconductor materials are waiting for the arrival of the inflection point to display the material plate on the screen. 23H1 realized revenue from-14% to 604 million yuan and gross profit margin from-3.2pct to 36.9%. Among them, Q2 began to enter the industry recovery period, achieving revenue from + 25% to 336 million yuan. It is expected that with the arrival of the traditional sales season in the second half of the year, Q3 company's profits will continue to improve; semiconductor materials sector, affected by weak downstream demand, industry inventory adjustment and other factors, achieve revenue from-11% to 260 million yuan, gross profit margin from-2.3pct to 36.0%, of which Q2 company product structure adjustment, revenue from + 24% to 144 million yuan. With the inventory adjustment of the semiconductor industry in the future and the arrival of the turning point of the cycle, this sector is expected to create more revenue for the company.

The company's new projects are carried out in an orderly manner, and the performance is expected to continue to grow.

In 23 years H1, the company's cumulative R & D investment reached 89 million yuan, accounting for 7% of the revenue in the reporting period. During the reporting period, the company's cholesteric electronic paper liquid crystal and PILess liquid crystal have achieved client verification, and I-line photoresist and 248nm photoresist antireflective materials have been mass-produced by some customers. The company actively promotes the changed fund-raising projects "annual output of 50 tons of high-performance mixed liquid crystal and 200 tons of high-purity electronic display monomer material project" and "acrylate and photoresist product upgrading and construction project". At the same time, 5000t/aTFT-LCD photoresist project and 5500t/a synthetic new materials project have been steadily supplied to customers, the production capacity of 100t/a high-performance optoelectronic new materials purification project is steadily increasing, and the testing capacity and production line construction of OLED materials are also advancing in an orderly manner. With the increasing improvement of the company's product structure, the future performance is expected to continue to grow.

Risk hints: raw material prices fluctuate sharply; new projects fail to reach production expectations; downstream demand falls short of expectations.