Events:

On August 25, 2023, the company released its 2023 China report that 23H1's revenue decreased by 42.42% compared with the same period last year.

To 279 million yuan, the net profit of returning mother decreased by 158.76% to-46 million yuan compared with the same period last year. In a single quarter, 23Q2 realized revenue of 129 million yuan, down 55.57% from the same period last year and 13.62% from the previous year, and realized net profit of-58 million yuan, 236.85% from the same period last year and 607.92% from the same period last year.

Comments:

Under the influence of many factors, such as the lower-than-expected pace of power grid bidding and the loss of participating subsidiaries, 23H1's performance is under pressure. Due to the decline in hand robot orders at the end of 2022 compared with previous years, insufficient release of robot orders in 23H1 power grid industry, commercial cleaning and other new areas of business revenue has not yet been large-scale and other factors, the company's revenue declined compared with the same period last year. Due to the decline in revenue, the maintenance of related expenses in order to promote new products such as smart shared charging systems, and the loss of shareholding subsidiaries, the company's net profit of returning to its parent decreased compared with the same period last year. It is expected that the power grid bidding process is expected to accelerate in the second half of the year, leading to the company's performance bottoming out.

Promote the application of AI technology and consolidate the technological advantages related to special robots. During the reporting period, the company continued to strengthen the research and development of basic system platforms such as positioning and planning control systems, and at the same time actively studied and explored AI-related technologies such as multimodal large models, and established and released a large model YJH-LM based on multimodal superfusion technology. YJH-LM can be used to perform voice interaction, image recognition and other tasks. It combines artificial intelligence technology with traditional robot applications to help company robots achieve autonomous work functions such as voice control and autonomous generation tasks. As of June 30, 2023, the company has 276 authorized patents (including 95 invention patents), 136 software copyrights, and dozens of non-patent core technologies, which have formed a relatively mature independent intellectual property rights and core technology system.

The multi-field and diversified strategic layout further opens up the growth space of the company. With years of technology accumulation, the company continues to launch commercial cleaning robots, intelligent shared charging systems, vehicle inspection robots and other new products, and targeted to carry out pilot application, customer development, channel construction, market development and other work, has achieved certain results. The company's product structure is diversified, and the space for long-term development is expected to be expanded.

Investment rating: the company's net profit from 2023 to 2025 is expected to be 126 million yuan, 409 million yuan and 642 million yuan respectively, corresponding to 54x, 17x and 11x respectively, covering for the first time and given a "overweight" rating.

Risk tips: downstream demand is lower than expected; market competition intensifies; channel development is not as expected; profit forecast and valuation failure.