In 2023, H1 revenue increased by 7.66% over the same period last year, with a slight increase in performance. According to the company's semi-annual report for 2023, revenue reached 167 million yuan, an increase of 7.66% over the same period last year. The net profit of returning to the mother was 62 million yuan, an increase of 0.31% over the same period last year. Deducting the non-return net profit reached 58 million yuan, down 2.62% from the same period last year. Benefiting from the sustained development of the UAV industry, the company continues to enrich the technology in the field of drug control, and strengthen product development, and the business is steadily rising. We maintain the company's performance forecast for 2023-2025. It is estimated that the company's net return profit for 2023-2025 will be 1.15 trillion yuan, respectively, and the corresponding EPS will be 0.37 trillion yuan per share. The PE corresponding to the current share price is 28.7, 22.7 and 18.4 times, respectively, maintaining a "buy" rating based on the high profile of the drone industry.

2023Q2 revenue rose 4.86% year-on-year, strengthened R & D efforts to improve technology layout company 2023Q2 revenue reached 124 million yuan, up 4.86% year-on-year; return net profit was 54 million yuan, down 4.00%; deducting non-return net profit reached 0.51 yuan, down 4.96% from the same period last year, product competitiveness continued to enhance, and the performance was in line with expectations. The gross profit margin of 2023Q2 is 63.27%, which is at a high level. In terms of costs, the company actively reduced costs and efficiency in the first half of the year, and the rate of 2023H1 management expenses decreased to 5.69% compared with the same period last year. At the same time, the company strengthened its research and development efforts and optimized the product matrix. The 2023H1 R & D expenditure rate reached 7.81%, an increase of 2.90pct compared with the same period last year, further improving the medium-and long-term layout.

Maintain the first-mover advantage in the field of drug control, create a new growth point of intelligent defense equipment, maintain the first-mover advantage in the field of drug control, actively expand other application areas of UAV, and create growth points in the field of intelligent defense equipment. In the field of drug control by unmanned aerial vehicles, it constantly enriches the technical means, and expands the application in the fields of drug traceability and characteristic analysis, drug manufacturing and emission monitoring, etc. In terms of UAV systems, the company has formed a relatively stable market by virtue of its high standard production line and outstanding product performance in long flight time, heavy load, multi-function and easy deployment. In other service areas of UAV, the company actively develops data processing systems, speeds up the construction of corresponding basic data and sample data, and cultivates new application markets; in terms of intelligent defense equipment, the company increases product development efforts to form a UAV-centered product system that can be used in the defense field, while accelerating the transformation of law enforcement equipment represented by multi-scene intelligent riot devices. In the context of favorable policies, the drone industry has ushered in a period of rapid expansion, the company has actively promoted its development strategy and its performance has gradually increased.

Risk tips: the expansion of the drone industry is not as expected; the drug market is shrinking; and the progress of the military business is not as expected.