Reporting results: company H1 achieved revenue of 180 million yuan in 23 years, yoy-22.6%; returned net profit of 38 million yuan, yoy-32.4%; deducted non-net profit of 34 million yuan, yoy-30.6%. Among them, Q2 realized revenue of 101 million yuan, yoy-21.7%, month-on-month ratio + 27%; net profit of return to mother 22 million yuan, yoy-25.9%, month-on-month ratio + 31.4%.

The performance boost has been gradually realized, and profitability has improved month on month.

In terms of revenue, the company's H1 achieved 180 million yuan in 23 years. Yoy-22.6%, was mainly due to the downturn in consumer electronics demand in the first half of the year, customer procurement of atomized alloy powder turned to the low end, and the unit price yoy-85%;Q2 achieved revenue of 101 million yuan in a single quarter, with a quarter-on-quarter revenue of + 27%. We think it is mainly due to an improvement in consumer electronics demand. Looking forward to Q3, fundraising iron powder shipments are expected to gradually realize the growth, superimposed folding screen powder and other products start, we think it is expected to maintain H2 revenue to continue to improve expectations.

In terms of profitability, the company's 23-year H1 gross profit margin 37.32% Q2 single-quarter gross profit margin 37.41%, month-on-month + 0.19pctash H1 net profit rate 20.96% Q2 single-quarter net profit 21.15%, month-on-month + 0.43pct, slightly improved profitability, optimized product structure, made breakthroughs in emerging applications such as automotive electronics and folding screen hinges, and waited for the climbing scale effect of iron fans to further boost profitability.

The sowing date of production capacity in 23 years, and the performance in 24 years is expected to accelerate.

Fund-raising project: the company's IPO investment project is expected to be put into production in September 2023. Without considering the new project, the carbonyl iron powder production capacity will double from 5500 tons to 11500 tons. At the same time, the new high-performance powder production capacity will be 4000 tons, including 2000 tons of soft magnetic powder for powder core. The fund-raising project will be put into production soon, which will help the company to break through the capacity bottleneck and focus on optimizing the product structure at the middle and high end, and the scale effect will also be highlighted, which will continue to promote performance growth.

Ningxia base 10wt new process project: the new process carbonyl iron powder is expected to increase production capacity by 100000 tons, demonstration capacity of 3000 tons in 2024-2025, and cumulative new production capacity of 1.3,6 and 100000 tons in 2026-2029. After the project fully reaches production, it is expected to achieve annual sales income of 3.423 billion yuan and net profit of about 593 million yuan, opening up long-term growth space.

Investment suggestion: as the leader of carbonyl iron fans, the company develops new business, develops new products, expands production by new technology, and releases new production capacity. It is estimated that the net profit from 2023 to 2025 will be 1.82 trillion yuan (154,000,000 yuan before 23pm, considering the recovery of the prosperity of the consumer electronics industry, the company's related products are under pressure, and the profit forecast will be slightly reduced.), corresponding to the previous share price 28-19-15 times Maintain a "buy" rating.

Risk hint: demand fluctuation risk; new project construction risk is lower than expected risk; raw material fluctuation risk; process technology innovation risk; new business development is not as expected risk.