Event: the company released the mid-2023 report that 23H1 achieved revenue of 2.498 billion yuan, year-on-year-4.71%, net profit of 64 million yuan, year-on-year + 3.59%, non-net profit of 54 million yuan, year-on-year + 11.92%, gross profit 12.69%, year-on-year + 1.93pct. 23Q2 achieved revenue of 1.411 billion yuan in a single quarter, year-on-year-5.91% / month-on-month + 29.91%, net profit of 57 million yuan, + 1.94% / month-on-month + 700.61%, deduction of non-net profit of 52 million yuan, year-on-year + 14.45% / month-on-month + 3207.97%, gross profit 13.44%, year-on-year + 3.11pct/ + 1.73pct.

Income slightly decreased, profit improved significantly: 23H1 terminal consumer market demand, although the company's revenue slightly decreased compared with the same period last year, but the gross profit margin and profit still increased, the main reasons: 1) more ODM/JDM projects + high-tech barriers to new orders to increase gross profit margin; 2) actively reduce costs and efficiency, strengthen management to improve profitability; 3) exchange rate tailwind thickened profits. Looking forward to the follow-up, with the improvement of the company's product profit structure, AI speakers, car / XR acoustics go hand in hand, and enjoy a broad space for development in the long term.

Generative AI brings new opportunities for speakers: jointly developed by the company and vifa, the company's exclusive production of "ChatMini" intelligent speakers was launched on the market in August 2023. The speaker's high EQ companion chat relies on ChatGPT and Baidu, Inc. Wenxin one word double AI drive. The development of generative AI products is expected to open a new development wave of interactive intelligent products, and then bring new development opportunities for the company's audio and electro-acoustic industry.

Automotive acoustics is progressing smoothly and is expected to enter a period of rapid growth: the company has become a platform supplier of the third generation automobile platform of the new power head P, some projects have been mass produced, and other new power customers have been actively opened up for mass production of a number of car audio projects of a new energy automobile enterprise Z; it has passed the factory certification and technical review of a number of new energy automobile enterprises, and is currently discussing project details. At the same time, in addition to a number of traditional car companies that have achieved supply, the company is working closely with several traditional car companies on multiple brand models. The company currently has advantages in automotive acoustics and is expected to grow rapidly in the future.

XR Acoustics binds global head customers: the company currently provides stable products for VR head enterprises such as VR P customers, and is deeply bound with major head VR enterprises at home and abroad, and has a number of research and mass production projects. In the future, with the entry of Apple Inc and the access of AI applications, XR terminal shipments are expected to grow rapidly, and the company's card is the world's top customer, with a broad space for growth.

Investment suggestion: the company's traditional electro-acoustic business is sound, automobile acoustics is promoted in an orderly manner, AI speakers and XR acoustics have great flexibility, and there is a broad space for future development. We expect the company's annual return net profit on 23-24-25 to be 2.01xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx69xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Risk tips: new product industrialization progress is not as expected risk; car demand is lower than expected risk; consumer electronics demand decline risk; exchange rate risk; trade friction risk; raw material supply and price fluctuation risk.