The company's 23H1 achieved revenue of 970 million yuan (+ 7.0% compared with the same period last year) and net profit of 350 million yuan (+ 6.8% compared with the same period last year). The prosperity of oral CBCT was under pressure in the first half of 2023, and the company's CBCT business achieved revenue of 300 million yuan (31.3% of revenue, compared with the same period last year). However, we are optimistic about the subsequent restorative growth of the company's CBCT business and the long-term development prospects of the domestic oral and medical imaging market, and maintain the "buy" rating.

The growth of 23Q2 has accelerated and orders are full on hand. From a quarterly point of view, the company's 23Q1 and 23Q2 achieved revenue of 410 million yuan and 560 million yuan respectively in a single quarter, which was + 1.3% and + 11.5% respectively compared with the same period last year.

In mid-2023, the company's contract liabilities were about 110 million yuan, an increase of 57.7% over the beginning of the year, mainly due to the increase in advance payments received by the company, indicating a rapid increase in the number of orders on hand. 23H1, the company's sales, management, R & D and financial expense rates are 9.1%, 4.5%, 5.0% and-4.9%, respectively, compared with-0.24pct,-0.19pct, + 0.29pct and + 0.58pct, respectively. Various expenses are well controlled, and the company's 23H1 exchange income is about 20 million yuan lower than that of 22H1.

Steady development of color selection business: 23H1, the company's color sorting machine business achieved revenue of 560 million yuan (+ 5.2% compared with the same period last year, accounting for 58.3% of revenue), and the gross profit margin of color sorting machine business increased by 2.7pcts to 50.4% over the same period last year. According to the company's investor relations activity record table, the domestic color sorter industry is relatively mature and the competition pattern is stable. The company has the largest intelligent factory and sheet metal and painting production base in the industry, and the production cost control ability is outstanding. Therefore, the gross profit margin of the color sorting business increased in the first half of the year, and the company expects the overseas export of color sorter to perform better in the second half of the year (23H1 overseas revenue growth + 4.1%). CBCT business is gradually recovering: 23H1, the company's CBCT business achieved revenue of 300 million yuan (+ 1.3% compared with the same period last year, accounting for 31.3% of revenue), and CBCT gross profit margin fell 2.9pcts to 55.3% compared with the same period last year. According to the record sheet of the company's investor relations activities, in the first half of this year, the oral CT market faced growth pressure and competition intensified, which suppressed the company's CBCT gross profit margin to a certain extent, but through flexible market strategy, CT business showed a good trend of low before and high after, and gradually recovered. The company won more than 1400 orders in the oral CT group purchase activity in June this year, and most of the orders are expected to be delivered in the third quarter of this year. New business development: since the company released the "Meiya teeth" oral health digital cloud platform at this year's Beijing Oral Exhibition, it has been used by more than 1000 customers, and the company's future oral digital development prospect is worth looking forward to. The company's spinal surgery navigation equipment is in the demonstration and promotion period, has successfully completed a number of thoracic vertebra operations, the company will speed up to promote the realization of market batch sales; the company mobile CT is also smoothly carried out according to the plan, and the company strives to pass the approval and registration as soon as possible.

Risk factors: macroeconomic pressure and lower-than-expected downstream demand; new business development in the medical sector is not as expected; increased competition in the industry; overseas business development is not as expected; exchange rate fluctuations.

Profit forecast, valuation and rating: based on the underlying technology of optoelectronic identification, the company entered the medical imaging market from color sorters across industries and gained a high share in the CBCT market. Taking into account the fact that the company's color sorter business has benefited from improved profit margins of economies of scale and foreign exchange earnings generated by overseas business, we adjust the company's 23-year and 24-year return net profit forecast to 810 million yuan and 930 million yuan (original forecast is 770 million yuan, 910 million yuan). The 25-year net profit forecast is 1.04 billion yuan. Considering the rapid expansion of the company's CBCT business, the continuous increase in revenue share, and the switching of the valuation system to medical device companies, we select comparable companies Mindray Medical, Tongshi Medical, and Yirui Technology, which are comparable to the company's Wind in 2023. The average PE valuation is 34 times. We give the company 30 times PE valuation in 2023, corresponding to a target price of 28 yuan, maintaining a "buy" rating.