Events. The company disclosed the semi-annual report of 2023: 1) the revenue of 23H1 Company is 2.146 billion yuan, the net profit of yoy+79.61%, is 185 million yuan, and the net profit of yoy+95.91%, is 153 million yuan, yoy+105.59%. 2) the single-quarter revenue of 23Q2 is 1.251 billion yuan, the net profit of yoy+67.17%, is 153 million yuan, and the net profit of yoy+84.13%, is 132 million yuan, yoy+91.08%.

The net interest rate increased significantly, and the expense rate decreased significantly under the scale effect. According to Wind data, 23H1's gross profit margin and net profit margin are 30.48% and 8.56% respectively; 23Q2 gross profit margin and net profit margin are 30.22% and 12.19% respectively. In terms of expense rate, the sales / management (including R & D) / financial expense rate is 4.68% 16.97% Maxim 0.75% Ji yoymure 2.69 Mae 1.39 mae 0.73pct, respectively. Under the scale effect, the expense rate of the company has decreased significantly.

The order is sufficient, and the improvement of operating cash flow is obvious. According to the company's semi-annual report of 2023: 1) the newly signed order from January to June 2023 is about 2.7 billion yuan (including tax). As of June 30, 2023, the cumulative amount of on-hand orders is about 8.5 billion yuan (including tax), and the order is relatively sufficient. 2) the inventory of 23H1 Company was 4.802 billion, an increase of 39.83% over the end of 22 years, of which 2.838 billion yuan was issued for goods, accounting for 57.89%, and the contract debt was 3.08 billion yuan, an increase of 22.38% over the end of 22 years. 3) the net cash flow of 23H1 operating activities is-504 million yuan, of which the 23Q1/Q2 of yoy-96.09%, is-4.10 trillion yuan respectively, and Q2 is greatly improved.

Lithium power equipment contributes to the main source of income, photovoltaic equipment waiting to be released. According to the company's semi-annual report 2023:

1) the income of 23H1's power battery equipment business is 1.804 billion yuan, and yoy+109.98%, revenue accounts for about 84%. 2) 23H1's photovoltaic business has obtained orders from well-known customers such as JinkoSolar Holding Co Ltd, Trina Solar, Tongwei shares, Hongyuan Green Energy, Jietai, Zhengtai, Ates, Hesheng Silicon, Xiexin and other well-known customers. As of August 30, 2023, the company's TOPcon laser primary doping equipment has signed a contract of 350GW +.

Profit forecast and valuation. We estimate that the company's 2023 Universe 2024 Universe net profit for 2025 will be RMB 7331,870 million, an increase of 66.4%, 23.4%, 11.4%, and 3.14, 877, 000, respectively. The average PE valuation of the comparable company in 2023 is 17.65 times. Considering the rapid development and good growth of the company in the field of lithium electricity and photovoltaic, we give the company 15-17 times PE valuation in 2023, with a reasonable value range of 47.05-53.33 yuan per share (EPS is expected to be 3.14 yuan in 2023), corresponding to a reasonable market capitalization of 95-10.8 billion yuan, "better than the market" rating. With reference to the PB valuation, the company's PB in 2023 is 3.73-4.23 times (comparable company PB range is 1.84-4.97 times in 2023), which is reasonable.

Risk hint. The release of the company's production capacity is not as expected; the new business development is not as expected; the downside risk of orders and performance caused by slower downstream delivery and reduced production expansion; intensified competition in the industry; payback risk.