Event: according to the company's semi-annual report for 2023, the company achieved 206 million yuan in operating income in the first half of the year, down 14.8% from the same period last year; the net profit from home was 3.73 million yuan, down 85.2% from the same period last year; and the net profit from non-return was-1.43 million yuan, down 107.1% from the same period last year.

Gross profit margin is basically stable, and R & D expenses are increasing. Due to the long acceptance cycle of some of the company's new products and customized equipment, the operating results in the first half of 2023 are under great pressure. In the first half of 2023, the company achieved a gross profit margin of 49.60%, year-on-year-0.03pct, and the company's gross profit margin was basically stable; net sales margin was 1.81%, year-on-year-8.57pct.

The company's net interest rate decreased greatly, mainly due to the company's large investment in R & D. in the first half of the year, the company's R & D expenditure increased by 32.71% compared with the same period last year, and the proportion of R & D investment in operating income increased by 8.24 percentage points. Mainly since the establishment of the New Energy Division in early 2022, the company has continued to invest in R & D. at the same time, it has also increased R & D investment in semiconductors and developed a number of new technologies and products.

The company is expected to have sufficient orders on hand to support the recovery of the company's performance. As the new products that the company put into research and development last year have been put into the market and the demand is strong, the new orders signed by the company have increased significantly compared with the same period last year. By the end of the first half of the year, the company's contract debt was 147 million yuan, and at the end of 2022 it was 80.21 million yuan. The company's contract debt increased rapidly, and the company's orders on hand were more abundant, which provided strong support for the company's performance recovery.

Multi-line layout of high-prosperity track, the steady progress of new products. ① new electronics: the company's new electronic laser processing equipment has been transferred to automotive electronics applications, obtaining new product line orders from mainstream car factories and leading manufacturers in the automotive supply chain, further increasing cooperation and maintaining steady growth. ② SiC: Silicon carbide ingot laser slicing equipment to obtain the head customer batch order, the product has been introduced into the customer production line for mass production, is now in the key customer market development stage. ③ perovskite: starting from the second half of 2022, the company started the development of a new generation of production equipment for perovskite thin film solar cells, and iteratively upgraded the processing format and production efficiency of the equipment. The equipment integrates a variety of laser light sources, some of which are customized and developed for the company. The company has been cooperating with the head customer's new process development and business communication, while constantly opening up new customers, there has been a breakthrough in new customers' new orders in the first half of this year. ④ MicroLED:MicroLED laser mass transfer equipment received its first customer order in 2022, and new customer orders were successfully landed in 2023.

Profit forecast: taking into account the company's performance in the first half of the year, we adjust the company's 2023-2025 net profit forecast to 0.81 hundred and ninety-one million yuan, maintaining the "buy" rating.

Risk tips: photovoltaic technology iteration is not as expected, new technology research and development is not as expected, market competition aggravates the risk.