Event: on August 19, 2023, the company released the "2023 semi-Annual report". The company achieved 1.769 billion yuan in operating income in 2023, an increase of 29.19% over the same period last year. The net profit returned to the mother was 366 million yuan, up 48.6% over the same period last year. The net profit after deducting non-return was 352 million yuan, an increase of 60.44% over the same period last year.

The company achieved a high increase in performance in the second quarter, and the core business maintained good growth: the company's revenue in the second quarter of 2023 was 1.079 billion yuan, an increase of 39.31% over the same period last year and 56.39% over the same period last year. The net profit was 249 million yuan, 60.87% higher than the same period last year, 113.81% higher than the same period last year, and 242 million yuan after deducting non-parent net profit, an increase of 71.48% and 120.40% respectively. The gross profit margin and net profit margin are 39.34%, 23.10%, + 4.16pct/+3.09pct and + 2.49pct/+6.15pct, respectively. The company's growth in the second quarter was mainly due to the recovery of traditional screw compressor business compared with the same period last year, especially the steady demand for refrigeration business, while the company actively developed new energy-saving and environmental protection products to respond to market requirements. The company's vacuum business demand is also good, promoting the continued growth of the company's business.

Attach importance to research and development, new products are launched one after another to enhance competitiveness: the company attaches importance to research and development, and continues to launch new products for refrigeration and air conditioning systems, refrigeration, heat pump compressors, air compressors and other fields, including the use of permanent magnet high efficiency motor, RTM series oil-free magnetic levitation centrifugal compressors, LT Ⅱ series of second-generation two-stage screw machines, oil-free screw air compressors, centrifugal air compressors, etc. Comprehensive competitiveness continues to improve.

Photovoltaic vacuum pump to maintain the lead, semiconductor vacuum pump gradual breakthrough: in the photovoltaic field, the company has long-term and in-depth cooperation with major domestic photovoltaic manufacturers and important machine vendors (Jingsheng Mechatronics, Shenzhen Jiejiachuang, Longji Green Energy, North Huachuang, Jiangsu Microconductor, Central shares, Tongwei shares, Tianhe Solar Energy, Jingao Technology, Wuxi Liancheng, etc.). Has a large market share in the industry. In the semiconductor field, the company has screw type, multi-stage Lu type and rotary vane pumps, the company already has a full range of medium vacuum dry vacuum pump products that can meet the most advanced processes of semiconductor production, and has the SEMI safety benchmark certification certificate, and is cooperating with a number of semiconductor equipment companies.

Investment suggestion: the company is the leading compressor manufacturer and vacuum pump leader in China. With the recovery of the macro environment, the company's refrigeration compressor business and air compressor business are expected to recover quickly, and the overall growth of the company will be more prominent. we expect the company to maintain a good growth trend in the next 3-5 years. The company is expected to achieve a net profit of 8.1 million yuan in 2025, corresponding to a PE multiple of 16-13-11, maintaining an "overweight" rating.

Risk tips: the recovery of manufacturing boom is not as expected; the business development of photovoltaic cells is lower than expected; the localization process of vacuum pump is lower than expected.