Event: in the first half of 2023, the company achieved operating income of 183 million yuan, down 10.26% from the same period last year, and net profit of 13.6806 million yuan from the same period last year, down 57.48% from the same period last year. 11.8258 million yuan was deducted from non-parent net profit, down 58.35% from the same period last year.

Bar code recognition business has grown steadily, and AI functional platform products have been launched to broaden the moat of business. In the first half of this year, the company's barcode business revenue increased by 18.97% compared with the same period last year, especially in overseas markets, where revenue nearly doubled. As the first company in China with independent bar code reading technology research and development, its product performance and price ratio has better industry recognition, and is committed to continuously improve product performance and reduce costs, AI functional platform products were launched in the first half of the year, making barcode identification equipment advanced in information reading ability, the moat of the business has been continuously broadened, which is the ballast stone of the company's steady development and extension layout.

The power semiconductor business is short-term affected by the prosperity of the industry and the construction of new projects, waiting for the industry to recover and new production capacity to resonate. The main reasons for the company's poor overall performance in the first half of the year are: (1) wide and micro integrated 6-inch wafer foundry production capacity transfer, sales of products mainly to inventory; (2) wide core micro and core micro Tek is in the period of construction, no income is generated, in a state of loss; (3) Jingrui electronics affected industry boom profit declined compared with the same period last year. The company's established strategic policy has not changed, committed to the construction of power semiconductor Smart IDM ecosystem, and made steady progress during the reporting period, in the process of construction, short-term labor pains are inevitable, but the development prospect is good: (1) the wide and micro integrated new product line SGT-MOSFET has been gradually increased, and is expected to contribute a clear income increment in the second half of the year. (2) the commissioning of the wide-core micro-wafer project will open the ceiling of wide and micro-integrated capacity, and 6-inch wafer products such as MFER are expected to return to the growth track; (3) the core micro-Tek backchannel thinning process will inject high-performance silicon-based and silicon carbide power device fabrication capabilities into the company. The power semiconductor business is expected to become the core driving force for the company's future revenue and performance growth.

Investment suggestion: the company is expected to achieve a net profit of 0.75,1.48 and 291 million yuan from 2023 to 2025, and the current market capitalization is 58.7,29.6 and 15.1 times PE respectively, maintaining the buy rating.

Risk tips: (1) barcode reading equipment overseas customer order volume is not as expected; (2) wide core microelectronics project construction progress is not as expected, synergy shows lag; (3) goodwill impairment risk.